able to pass before the christmas holidays that payroll extension. so we could start right there. and i think the president use ad brilliant example to show how we can come together with his bipartisanship. i will use that every time i talk. remember what the president said about our navy seals when he pinted out, some of them are republicans and some of them are democrats. that didn't matter they were americans doing a job and they went in there and it was team work. and i'm going to ready for navy seals for republicans and democrats to come together to take out osama bin laden, surely we republicans and democrats in the house can work together for the benefit of the american people. . .

>> we've got to get out into the communities, go into these targeted areas, my own home state of georgia, nevada, where the home foreclosure deal is so intense, and really brings all of these actors, bring the banks, bring treasury, bring hand, bring all these programs that we've got because the problem is that many other people don't know the available

programs we working for us. with $50 billion we put to the financial services into the treasury department to be able to help struggling homeowners. but in order to get that to work we have to get whole seminars, workshops, bring them all under one roof, and get our people into communities and use a ground attack to be able to educate our homeowners and help them, and have all of that have fha come have treasure in have the bank on how the how below services, all under one roof and that's the way, he's committed to doing that as well. >> and finally your fellow georgian, newt gingrich. >> what you think about that? >> i think that really to tell you the truth i know newt gingrich from georgia, i've been in politics for many years. and some other things i have

been seeing in terms of the tactics is not the newt that i know. and i think that, my hope is that we can look beyond all others. i'm not so sure with some of the dog whistles that have been going out with the food stamp president come with some of the things he's been playing to is very healthy for the country going forward. and i think he's done a marvelous job in where he's come from, but i served and anxious to have an opportunity to sit down and talk with him, and make sure i can help him to be able to see some of the dangers with some of the direction, some the things he's been, and he's appeal to some of the worst element. and i think that is not necessarily the newt that i know that i think there may be some good conversation with that. >> david scott, a democrat of georgia, thank you for being on c-span here in statuary hall.

we are live talking with members of congress about their reaction to the president's speech. and joining us now is another member from the new jersey delegation to an this is frank pallone, democrat of new jersey. congressman pallone, what do you think? >> i thought it was a great speech. i love the thing of building an economy that last, because i think that so my constituents want to be. they like the idea that we're not only creating jobs but try to bring back manufacturing, trying to educate young people so that they're trying for the jobs for the future. that's exactly the thing my constituents talk about. >> tell us about your district and its current economic situation. >> my district is a combination of industrial and tourism. there's a lot of manufacturing that has been lost over the years, over the last 20 years, and i think there's a lot of

opportunity for new manufacturing in my district. so that's what i say, this is right on point in terms of, people say to me we're lost jobs overseas, are we ever going to get them back? or do you guys even care whether they will come back. i think the president made quite clear he does care and that that's an important part of our future is the manufacturing base. >> congressman pallone can you been around washington for a while and congress for a while, was the president there in his assessment of both parties? >> i think, again, if you go back to my constituents, they really want us to work together and i worry that ideology it's in the way and the democrats and republicans don't work together for a common goal. so i think it was important mentioned that because we will never cost anything unless we work together to support part of trying to accomplish the goal of building an economy that last. >> two of your fellow new jerseyan's are having primary,

congressman, have you taken sides? >> no, and i will. i think it's very in unfortunate that is taking place. the map that was adopted was the republican map, and it's really unfortunate because i think that both of them are very good congressman. i would like to see them both here. it's sad to see them running against each other the next frank pallone, you can see them on the house floor quite often. speaking on issues he has been speaking with us here in statuary hall. >> as we continue to talk with members of congress, we are talking next to the representative from toledo, ohio, marcy kaptur. she has probably the longest serving woman in congress, is that correct? >> that is correct, and the house. and longest-serving democratic woman in u.s. history. i hope i don't show too much for

the where. >> first of all, when you listen to the president's speech, congresswoman, what did you hear that would be good for toledo? >> well, first of all he he mention toledo's name and he mentioned cleveland's main. the only two communities he missed work lorain and sandusky in terms of larger kindred, and lakewood, something areas that are in the new ninth district. but what was wonderful was his emphasis on redeeming the american dream for all. and focus on manufacturing, when did you ever a president talk about the muscle of america? and that resonates in our part of the country because that's who we are. people who work with their heads, people build america forward from people who grow america forward. this is music to our ears. talking about turning unemployment into a training and reemployment program, talking about veterans jobs, talking about department of defense taking the lead on energy which is what i champion as a member of the defense committee for my

career, talking about wall street prosecution and a fraud unit at the department of justice. i just shot right out of my seat. i thought, finally finally someone is putting the pieces together and talking about rewarding investment in america. all these businesses that tried so hard and they see these big global companies take jobs abroad. and rewarding innovation and hard work here at home, i was just, i thought this president has just hit full stride. >> jeep has added jobs in your district, and didn't the resin come and visit that doctor? >> the president has been achieved, absolute. more than once. and jeep wrangler jeep cherokee, jeep liberty are now owned by chrysler fiat, together they are doing a phenomenal job. all the workers and a management in the plant, they are doing, the orders are twice as much as they can produce right now.

the beautiful trim, beautiful interiors, more energy efficient. america is really catching up. and gm i have to say, as the president mention in his speech tonight, now the most productive automotive company in the world. they have just taken number one on the charts again. and the crews built a northern ohio from the fund to toledo, that is an ohio car. >> now, congresswoman, you've been around washington for a while. what issues do you work with republicans on the closely? >> well, usually on defense matters we have pretty much a meeting of the minds. i would say on agriculture we do all right. hahn transportation, that's what my subcommittees where we really met with. on housing we need to be more robust. there's some cooperation there. on budget it's a little more rancorous. but i would say that there many

areas in which we can work together. i think the great lakes members, a great lake issues, find common ground. and so i think you can always find a way to move an agenda forward, but you have to keep working at it. >> well, congresswoman marcy kaptur, your next political battle will be against a fellow democrat, dennis kucinich is also vying for the nomination in your district, correct? >> that is correct. the ninth district remains the ninth district. for the five counties i have represented and carried to come by the state legislature drew about 320,000 people in cuyahoga county on the western and lakewood, rocky river they pillage, half of brooklyn, maria in brook park. awards 13 tonight in cleveland. and do you know what? we intend to carry the ninth district. >> when is the primary? >> that primary will be march 6 and early voting starts

january 31. there is very little time switches ask the people on the north coast from toledo to sandusky, avon lakes, sheffield lake, rocky river, lakewood, pay attention, we are coming their way. >> marcy kaptur is the longest-serving democratic woman in u.s. house history. she's been talking with us here in statuary hall followed the president's address. >> and we continue our live coverage with another midwesterner. this is jeff fortenberry who is a republican from nebraska. congressman fortenberry, one of your fellow nebraskans was sitting with mrs. obama tonight. warren buffett secretary. >> i didn't see her. i didn't necessarily know who she was there in fact i asked senator nelson, democrat senator from the rescue, we all sat together as a delegation who she was, and he didn't know her either.

>> we've talked a lot democrats tonight found tonight have found that the presidents speech was very bipartisan. do you agree with that? >> well, the president give comic is a strong and poignant speech but that's one of his skill sets. and i thought it was particularly appropriate, the bookends of the speech were particularly pointed an appropriate as he gave heartfelt tribute to the sacrifice of our military, particularly in iraq but all throughout the world. i thought that was very strong and very appropriate, and showed good command by our commander-in-chief. i thought his emphasis on reviving american manufacturing and creating a level playing field in trade and ensuring where jobs returning from overseas were strong. but we did have a litany of things in the middle of the speech that suggests that all power is going to come from washington versus power being in the individual, in concert with her family and community. invested in small business and

entrepreneurial enterprise. that's where the strength of america comes from so there's some philosophical differences there, particularly suggested the federal government should basically take over education. the sources found in local control, parents of children, partnering with teachers, partner with administrators to ensure that the great a good environment for the schools. that's where the source of educational excellence comes from, not the federal government. so there were some clear differences there as will. >> speaker boehner have some representatives in the energy industry in his a box and some who had worked on the xl pipeline or would have worked on xl pipeline. that would have affected nebraska, correct? >> that's right. we and nebraska are in a different, typical in particular -- that you your situation. we need to ensure the environmental integrity of our natural resources. a year and a half ago i began to urge the state department listen to nebraska, we need to

relocate, recite this by. the pipeline is going over a highly sensitive environmental areas, and he needs to be move. we're hopeful that perhaps the president would find a way to get some sort of transitional approval, temporary approval while the side in the appropriate citing takes place in nebraska but now we have the keystone pipeline as a big political proxy fight. >> what do you see happening in congress in the next couple of months as far as legislative action? >> it would be my hope the president proposes a budget that can balance over time. he didn't suggest anything like that tonight. we start up our budgetary season very shortly. we'll pass probably a strong budget again in house of representatives. it's unclear if the senate will actually act. they haven't passed -- they haven't passed the but in 1000 days. a lot of tough choices. had to be made. but clearly that's going to be the next round of discussion in

the house been a congressman fortenberry, republican of nebraska has been speaking with his father and the presence address. >> thank you. >> and now next door to nebraska to is the state of colorado, and we are joined by one of its members, and this is scott tipton, republican of colorado. congressman tip ben, thank you for an being with us you on c-span. what did the president say that you agreed with deny? >> when the president was talking about give up in our natural resources i think with common ground and you saw the response. we hope he will truly follow through with it. and, unfortunately, did not want to talk like keystone pipeline. 20,000, to 100,000 new jobs that would be able to great requiring no federal spending to be able to put americans back to work and to be able to create revenue to the present apparently would like to be able to spend. >> when he was talking about the

environment, as a member of the national resources committee, where did you find agreement within? >> i think every american, we all want to have clean water, will want to be able to have clean air. we are of the opinion that we can have that win-win, to be able to take advantage of the tremendous technology that the president noted to be able to develop our resources responsibly right here to be able to create american energy, to be able to use american resources, to be able to put americans back to work. >> tell us about your district. >> we have the eighth largest congressional district in the united states based on geography. it's not the entire state. 54,000 square miles, the most beautiful part of the country through the rocky mountains. cities include grand junction, pueblo, director, cortez colorado. >> one final question. your colleague from colorado did not attend the speech tonight.

in a protest but what do you think about that action? >> you know, every member makes their own decision, and they will make their choice. i certainly wanted to be able to be here for me it's important able to what the president has to say. i think we need to be getting to real solutions for this country. >> republican of colorado, congress and tipton, thank you. >> and we will continue our westward journey here in statuary hall, join now by a longtime member from california. effect is represented to districts in california and these also serve as that states attorney general but i hope i got all that right. >> that's correct. >> dan lungren, the republican of course, but now in the sacramento area, correct? >> correct. >> what did you hear from the president? >> well, as usual he is a very good rhetoric. the question is whether the substance matches up with this writer.

i'm pleased he had a note to the military, started off with that can ended with a. mention the military in between, but the amazing subsidy thing is the only large cut that is taking place with the federal government is to the military. those two things didn't quite jibe. i was hoping he would talk about, in series terms, of the deficit. that is a huge challenge facing us, and i counted 21 different points he made. it wasn't until number 17 that he talked about the deficit. and then not at any length. and then third, he didn't make the connection between our necessity for creating jobs in this economy with a negative impact of the deficit on the private economy. so i was disappointed. look, i really like this president. he's a nice guy, but it's his policies i find very, very difficult to match to the reality of the facts that are out there. >> to questions. number one, did you hear anything that would represent

our help your high-tech industry? >> he did make a passing reference to the back went to do something about those students who come from overseas, other countries, who get their top degrees in engine and so forth, and then under our immigration laws have to go out somewhere else. that is simply prevent only got a mild response from the audience but it is a very, very important thing that i worked on for years, and they know he has. one other think i think is extremely important he mentioned it, only got it smattering of applause. is advertising on a bipartisan basis to try to do something about the cybersecurity needs of our country. the threat of cyber terrorism and the threat of cyber threats and intrusions that are taking place on a daily basis. this administration is moving forward with it. he mentioned it today. i've been working with them on that as a people of both sides of the aisle. that's a real positive that i wish more people would pay

attention to. >> and, of course, congressman lungren the district has a lot of high-tech companies in in a. and, finally, house governor brown doing out in california and out in sacramento? >> we will see what happens this year. he has suggested the people of california want to be taxed higher. he wants to put that on the ballot in november. if that does not succeed in the polls which suggest it will not succeed, then he won't probably have a platform to talk about serious spending restraints in the state. the fact of the matter is we are broke in california. where somewhere between the federal government in greece. so my hope is here in washington, d.c. we don't follow the california direction and rather california understand that phrase at some point in time when you broke your to admit you're broke and you have to do something about it. >> dan lungren, republican of california here in statuary hall following the president's address. and now from california to new

york city, and the upper east side of that city, carolyn maloney, longtime representative from the upper east side of new york city. and congresswoman, how did the president to deny? >> i thought he was magnificent. he had a unifying theme calling upon republicans and democrats to work together, to build a blueprint for a better economy for america. a big theme unfairness, and on hard work being rewarded, responsibility being rewarded, and fairness and everyone playing by the same sets of rules. he hit everything, a whole host of areas, but he called upon all of us to work together. and the fact that when we do, nothing is impossible, that we can actually achieve all of these goals. >> congresswoman, he did, a lot of your extensions are in the financial services of course. he called for some new

regulations, new tweets to have financial services are administered. and also new financial services investigative unit as a member of the financial services committee, what do you think? >> we need to see the specifics. he also called that the regulations that have been put in place in response to the financial crisis should be implemented. there's a big push to roll them back by the republicans, and he made it very clear that he would not allow that to happen, that certainly be honest, hard-working citizens in new york, on wall street and everywhere else want regulations that crack down on abusive practices, on unfair practices and highly leveraged our risky practices. but the specifics were not very passionate he called for a number of things that he was a respected about. he talked about a new trade enforcement unit. he talked about a new enforcement unit, working with a

cheese on the housing crisis. he talked about new ways of looking at problems that are still there and how we might address them. >> what issues do you work particularly close with republicans on? >> we need to work on more of them. usually financial services was a very unifying committee because what is more important than the safety and soundness of our country? so in many cases one of my bills, the credit card bill of rights, was a very strong bipartisan effort. i now have a bill in that help you get a lot of republican support to get small micro loans out to entrepreneurs, starting a business, another way to help with creation of jobs. also with the women's caucus, there's a bipartisan effort on many of the family and work policies, balancing family and work, cracking down on sex trafficking or abusive practices. there are not enough areas that we worked together. we have to work together with

more of them. we all try to stick with the republican for the state of the union, and i was sitting with louie gohmert from texas and i forgot control, he is opposed. i'm choice, he's pro-life. so we are sort of the odd couple on where we stand, but we agreed to be agreeable and to look for some areas that we could work together on. >> are you friends partially? >> yes, yes, i am. >> carolyn maloney, a democrat of new york talking to us about the state of the union that the president just gave it i might add that 26 of us gave our seats, our tickets to veterans. i gave one to a returning veteran from afghanistan who spent 16 months there, a west point graduate. so his emphasis on the fact that our men and women are coming back from iraq and the are such an important part of the strength of our country, it's a good thing. >> representative maloney.

and out in other member of the new york delegation is joining us, and this is representative doctor nan hayworth who, if i'm correct, you're an eye doctor, greg? >> i am an ophthalmologist, and i surging, yes. >> freshman? >> freshman. >> first state of the union or second? >> second. the president certainly has some and inspiring thoughts for us, and the key thing really is the mechanisms by which we reached the dreams we all share. for example, we all want to see our industries revived, manufacturing, our businesses. the mechanism that the president has proposed, although part of it, trade agreements that we passed for both parties come and i was a great thing for our international outreach, but to make the tax code more complicated with the system of new credits and ways in which we

again pick favorites among out economic sectors isn't the optimal way to do it. >> when the president talks about republicans and democrats and lack of consensus here in washington, is that fair, is that a fair criticism of republican? >> i think the president himself does need to take a share of responsibility for that atmosphere of division. and i am one of these republicans who have voted legally with a present that are not from within our republican congressional delegation. so i certainly want to reach out and i want to work with the president, but he knows very well that republicans reject pretty much categorically increasing taxes. so, to propose that as a major means of reducing our deficit, is something that is done,

unfortunately, with full knowledge i think because the president is a very intelligent man, that could be a divisive maneuver. so i would love to see him take a very different approach in that way. >> what do you think of the president talking about the warren buffett will? if you make a million dollars you should a 30% tax? >> i am an advocate for a flatter, a fairer tax code for everyone. i think that we will enjoy the benefits of liberty, and the benefits of growth when we let americans who work very hard and earn and save and invest, to keep those dollars in our economy and that sent into the federal government. the federal government doesn't do nearly as well. and the president quoted president lincoln saying that the federal government should only do what we as citizens cannot do. and i could not agree with him work in which is why we should keep our tax rates low in and

finally, congresswoman hayworth, where do we stand where it comes to the payroll tax issue? will not passed the house of representatives because i'm a member of that conference committee, and yes, we will achieve a i'm confident we will achieve the payroll tax holiday extension. and we will responsibly provide for those funds that go into the social security trust fund and are committed to being paid to our retirees years down the line. >> congresswoman hayworth from the year, a republican. as always, thank you. and again, we are live here in statuary hall just off the current house chamber. the statuary hall come you can see a lot of reporters, a lot of media, a lot of members of congress in here right now following the president's address. and this served as the house of representatives from 1808-1857 when the current house chamber was finished. in fact, five presidents were and document in this room here in statuary hall.

and those presidents include james madison, james monroe, john quincy adams, millard fillmore, and andrew jackson. is also an document here, and now joining us is freshman senator from arkansas, john boozman, senate republican . showing off with all of your knowledge. i'm impressed. >> you tell us what you thought of the president's speech. and by the way, first of all, who did use it with? a lot of center set with members of the other party? >> i actually sat with a member of the house, john mica on one site, chairman of the transportation committee, and on the other side was the nebraska delegation. so, you know, was with all those. >> what did you from the president that you agreed with? >> well, apart that i agree with, he talked about us actually coming together, doing some things. i'm sure there's probably 80% of all of this stuff that both sides, in the pen is, democrats,

republicans, the president agree with. and if we could just establish that, get that done, get some things that it would be a big step in the right direction. ..

talking about tens of thousands of jobs throughout the country. we also talk about the separation, the rich are growing richer and those kind of things. these are good, middle class jobs. >> senator bozeman is dr. boozman. a eye doctor. >> i rather you introduce me as a optometrist. that is one of the most respected professions in america rather than a senator. your approval rating is 8%. you senator coburn says you wonder about the 8% says we're doing a good jobe. >> senator boozman, a republican from arkansas. thank you very much. we've got one more interview at least, two more interviews that we're going to do this evening here from statuary hall. we're going to get a different perspective in just a second from maryland governor martin o'malley. he is a democrat. he is also chairman of the

democratic governors association. and he was here listening to the president's speech tonight and we want to get a governor's perspective what the president had to say. when you think of your state of maryland what did the president have to say thaw agreed with that would benefit your sit state. >> i thought the president's focus on jobs and job creation and making the right choices to get people back to work is really what every state is about right now. the bottom line, we can't make progress unless more of our people return to work. what we have seen because of the president's choices in many instances in our own state, we see gm hiring again, making the next generation of electric-drive vehicles. we see trade increasing out of the port of baltimore which is creating jobs and as we sell more and more american products abroad. our schools, thanks in part to the president's help, are actually raising standards. our graduation rates are rising. the president challenged all

of us to do more. i think all of us as citizens, i think he challenged congress and i think he challenged the states to raise their mandatory age for high school in so no child can drop out unless they achieve a high school degree or the age of 18. >> governor o'malley, annapolis is only 40, 50 miles from where we stand now. so you may have a different perspective on the partisanship in washington but could you compare it to annapolis and what you see here and how that affects you as a governor? >> well i think the whole country is going through a period of polarization. what i liked about the president's very strong and fearless message tonight it reminded all of us that the greatness of our country wasn't built by any one person it. was built by all of us working together. that is the ethic we tried to restore in annapolis. we've been more successful than not in improving our schools and making the right invests and actually last month, driving our

unemployment rate down to 6.7% now. we still haven't recovered everything we lost in the bush recession but we are creating jobs again and moving ahead quicker than we otherwise would have if not for the president's leadership and the good decisions that he has helped us make again. >> you're currently in your second term. are you term limited? if so what is next? >> yes, i am term-limited. i don't know what is next. what i know right now we have a big session ahead of us in nap police. we have a lot of important decisions to make about the investment west make in transportation infrastructure, about the investments we make in our children's education. not only balancing our budget but also moving forward at the same time. that will keep me plenty busy. >> governor martin o'malley is a democrat from maryland. he is a democratic governor there and head of the democratic governors association. thank you, sir. thank you for being with us. >> thanks a lot.

>> and now joining us from ohio, a republican is representative bill johnson. congressman johnson, if you will start, tell us where your district is. tell us about your district. >> you bet. my district runs along the ohio river out side youngs town, ohio to outside of cincinnati. takes six 1/2 hours to drive it from one end of the other. we love it that is appalachia ohio. >> how would you describe the economic condition of your district? >> we have some of the highest unemployment in the nation. the people in my district are hurting and the economic policies of this president have put them in that situation. i mean if you look at the price of gasoline, we're paying twice as much at the pumps than we were when he was inaugurated. when you look at utility rates, we're paying on the average $300 more per month than when he came into office. and he had an opportunity

tonight to put us on a different track and he decided not to do that. it's another example of how this president's actions and his words don't match. he talked about a dysfunctional senate. he had an opportunity to tell this senate to come back to work and pass a budget. remember, it has been 1,000 days since the senate of the united states has passed a budget. he had an opportunity to tell the senate, if he really wants to create jobs take up the 30 jobs bills that the house republicans already sent to the senate and get to work on those. he talked about an all of the above energy policy and yet that comes on the tail of just a week ago when he rejected the keystone xl pipeline that would have created 20,000 immediate jobs and a 100,000 jobs down the line. we're talking about natural gas. we're talking about oil. and yet his epa and his department of interior have got a war going on those

fossil fuel technologies. so, you know, very, very frustrating. we can't, we can't figure out which barack obama is going to show up on any given day because his words and his actions simply don't match. >> now your state is going to be one of the focuses of the 2012 election as always. what are you looking for? >> well, you know, the people in ohio pay very, very close attention to what's going on not only within our state but nationally. they know the voice. they know the reputation that ohio has for being a central figure in presidential elections. and you can better believe that the people that i represent are watching very, very closely and they're not, they're not happy with this president's performance. >> what do you think washington, you're a freshman, correct? what do you think washington can do to help your district? >> well, you know, first of all, washington, mostly needs to simply get out of

the way. you know, we've got a federal government that, that has outgrown its ability to discipline itself. i supported a balanced budget amendment. washington can't seem to get it through their heads that they have got to learn to live within their means. overregulation. regulations cost our economy about $1.5 trillion a year. last year this administration put $100 billion worth of flue regulations into place. every time you turn around, the epa and the department of interior is reaching further and further and further into the pocketbooks of the small business owners that i represent. so washington needs to get out of the way and learn to live within its means. >> bill johnson, republican from ohio. he has been talking with us here in statuary hall. thank you, congressman. >> thank you. >> and we are going to continue our coverage and we are pleased to be joined by a frequent visitor to c-span

and somebody who often speaks on the house floor and that is congresswoman sheila jackson-lee and she has either two strapping bodyguards or some guests. who are your guests, congresswoman? >> i was privileged to have these gentlemen as my guests tonight at the state of the union. the first they attended. sergeant williams who had several tours in iraq and captain lewis, who you wouldn't imagine he has been in united states military for 10 years and serves at ellington base, ellington in houston and so does sergeant williams. i'm delighted to have them this evening. >> gentlemen, welcome, welcome to washington and the state of the union. why did you invite these two? >> oh, i think it is very important to continue our theme of saying thank you. and i initiated a few weeks ago before we left town the yellow ribbon campaign to wear yellow ribbons and say thank you to all our

returning soldiers. we've got quite a big effort going on in houston. we did an effort on the floor of the united states congress on december 15th. so i wanted to make sure that our troops knew that we appreciated them. i think the president said it night how much we appreciated our volunteer military. thanked them and indicated that our democracy and freedom certainly is because we have young men and women willing to serve in the united states military. >> gentlemen, your congresswoman here, congresswoman sheila jackson-lee, often has one of the better seats in the house chamber and has a chance to shake the president's hand. did you get that same chance? >> i didn't get the opportunity this time but it was a great experience. being able to come out and attend this event with her. maybe next time. not tonight. >> they had a good spot themselves. i understand they were seen quite frequently. >> well, congresswoman, let's look at the energy issue that the president focused on. houston's your home. do you disagree with some of

the things that the president said about the oil industry? >> i think the president struck a good balance. i think of course that his position has to be further explained and i think it's important to note that he indicated that he is encouraging his administration, the secretary of interior to increase the exploration for 75%. he indicated he wanted to see an integrated, synergized energy policy that would include all facets of energy. that's good for houston. he talked about the environment and i think that is enormously important. i think many of my colleagues have misconstrued the decision on the keystone pipeline. the president said that he could not and would not make a decision in 60 days. he didn't say that he would never make a decision. and i ultimately believe that is a decision that has to be made and we'll see that going forward. with the environmental issues handled. that is important. on the issue of taxation, i think we need to sit down at the table to find the best way to share the burden of

taxation as it relates to subsidies for the energy industry so it is balanced and the president can do what america wants the country to do. invest in manufacturing, train new employees and have a, if you will, unified energy policy. so i saw some very good elements. i saw an olive branch being extended by the president and i want my friends in the energy industry to reciprocate. let's sit down to find out how we establish a real energy policy for america. >> gentlemen, we won't ask your opinion on the xl pipeline, very quickly, name and hometown. >> leonard williams, houston, texas. >> trammel lewis, baton rouge, louisiana. >> welcome. congresswoman sheila jackson-lee joining us here in statuary hall. now another werner is going to be joining us here in a second. and that is congressman trent franks a republican of arizona. he is working his way over

here as we speak. and we're going to lose him here in just a second. just grab him by the arm, molly and drag him over here. there you go. we'll get him over here. in the meantime we want to show you what statuary hall looks like. it is emptying out a little bit now. a lot of members of congress have already spoken to their media. and a lot of media are breaking down but we are still here. we have a republican now from arizona, trent franks. if we could, let's start by talking about your colleague, gabrielle giffords. did you get a chance to talk to her tonight? she was sitting between two members. >> i didn't crowd her tonight. she and i had a chance to talk earlier and i just think it was the highlight of the evening. you know, she is going to be missed around here. she's someone that has demonstrated kind of a spirit and a just a willingness to fight back to the extent that she transsended in her life one of the greatest trage i did

is i suppose -- tragedies anyone could face. she is living example of poise and kindness. how thankful and grateful she should all be that she came our way. >> well, congressman franks, when did you think of the president's speech and where do you agree with him? >> well i agreed with him when he quoted abraham lincoln. when he said government should only do for people what they can not do for themselves but it is so hard for me without sounding terribly partisan to express my reaction to that because it is so completely disconnected from his policies and from his stated perspective and certainly from his performance in office. it's a little like elmer fudd saying we shouldn't shoot rabbits, you know. it is completely antithreat call to his known philosophy. >> when he criticized republicans and democrats for partisanship, was it a

fair criticism do you think? and do you view your republican party the same way? >> well i think there is a lot of partisanship and i wish that our focus was trying to do those things that were based in the truth and we're committed to making the country better, i really do. and it's easy for, you know the other side to try so pick out areas where we seem objectively partisan and easy for us to try to do the same thing. all i can try to do, when he talks, i didn't hear him talk a lot about jobs tonight, really what he would do. we have over 30 jobs bills that the house republicans have passed and sent over to the senate and they just refuse to vote on them. and i don't, i don't know how i can be called just partisan for thinking that is not, that is not a good thing that is not, that is not cooperation. that is not working together when our votes, when we passed these jobs bills and they don't even vote on them. i don't know whats we can do.

you know, we've got a president or should say majority leader of the senate that simply will not take up house bills and the, in the white house we have a bystander that won't help us see a vote on those things. and then you know, it is all partisanship. is that -- >> congressman franks, what about the payroll tax issue, will that be resolved? >> i think it will. there is no doubt about that. seems to be consensus that will take place. so i don't know that there's a whole lot to be, you know, a whole lot of discussion that can take place there. i think it will happen. >> trent franks, republican of arizona, talking with us. following the president's state of the union speech. >> hey, trent? >> this guy is living proof there are good democrats in the world. and i mean that. he's, my man. >> we're going to talk to him next. we'll see if he says the same thing about you, congressman.

[laughter] brad sherman is a democrat of california and we're going to put you in place and ask you, what got you going about the president's speech it night? >> well, a snum per of things. his. his dedication to jobs. focus on fairness to the middle class. one thing probably nobody else mentioned, his attack on the filibuster. this place is dysfunctional enough already. if you have to get 50% of the vote in each house, controlled by other parties. but the to think that one senator can put a hold on a nomination, or that it take as 60% vote to move anything in the senate, it may be thought to be presumptuous for someone outside the senate to talk to the senate about their rules but their rules are screwing up the whole country. >> what rule changes would you like to see in the house? >> frankly i just like to

change who rules the house. >> well, you're next big political battle is a primary correct? it is intra-party contest between two sitting congressman. >> we don't have primaries in california anymore. we have the new washington or louisiana system in which the top two candidates from whatever party, go on from the, from the first election to the second. so in the first election everybody gets the same ballot. and in the second election everybody get as ballot with two candidates. it sounds unusual but that's how we endorse, elect county supervisors and city council members in most parts of the country. now that is how we elect congressman in california. >> when will that primary take place in june? >> first tuesday in june. then the runnoff in november and most people are predicting that you will have two democratic congressman on the ballot in november. >> brad sherman, what issues

do you work with? you were chatting with congressman franks here, republican of arizona. what issues do you work with republicans on? >> well, i work with a wide variety of republicans on different issues. i work with ed royce on both foreign policy and on a financial services. gary miller and i have been allies for years dealing with the con forming loan limits and making sure that you can get financing in california for middle class families who are buying homes with higher price tags than what you see in most of the country. and then trent and i working on iran along with of course senator mark kirk who is in our prayers now of course. so i work with a variety of republicans on a variety of issues. >> brad sherman is a democrat of california, joining us, commenting on the president's speech.

>> thank you. >> and congressman gingrey is a republican from georgia. and he is our last interview this evening. so, congressman, you get the 11:00 number as they say. tell us what you thought about the president's speech. >> i guess i'm batting cleanup. well, you know, the president gave a political speech tonight. i was a little disappointed. there were some things that i was pleased to hear to be fair and balanced in regard to, to teachers and, having capability of rewarding good teachers, pay for performance if you will and making it a little bit more feasible to get rid of bad teachers. but then he went on in regard to education, kind of shocked me when he said that from the federal government we're going to dictate that

every child stay in school until age 18 or until they get a degree, whichever happens first. what if some youngster at age 17, decides that they want to go into the military and be part of that our great military and with their parents permission they can do that? again, it's, all this business of government control and takeover just like forcing individuals, unconstitutionally, to purchase health insurance in obamacare. the president talked about energy and wanting to, on all of the above approach. he certainly got a bipartisan applause line, standing ovation in regard to that but then he goes right back and talks about all the studies we need in regard to high lick fracturing, to get that natural gas out of the ground. he acts like what he did in regard to keystone xl is part of all the above

approach but what he does is shift jobs to china. he talked about competing with china. that is a little disingenuous. we had 20,000 direct jobs in regard to keystone xl, 100,000 indirect jobs. again the thing that bothered me too, to say i'm going forward and do things with congress or without and we see some of that and in his nonrecess, recess appointments. in regards to the national labor relations board. in regard to the consumer financial protection agency, and something that probably should be a committee, not one person, that is hidden within the department of treasury or the federal reserve that congress has no reach over. i just see this president did not take responsibility for the unemployment rate of 8% which is persisted for 36 months. he did not take responsibility for the fact that he is increased the debt as much as the debt was

increased from george washington to george h --, herbert walker bush in 3 1/2 years. the president is a likeable individual, there is no question about it. he gives a great speech. i have never seen anybody better at a teleprompter. make no mistake about it was a political speech and he has not taken responsibility for a failed administration, creating envy, class warfare, divisiveness, tax the rich. he talked a little bit about what we need to do in regard to medicare and social security but only if we're willing to raise taxes on the job creators. we need, there should be no caveats in regard to fixing medicare and social security. we can do that this year in a bipartisan way. >> we'll, let's ask you one political question, congressman gingrey. your fellow georgian newt gingrich wants to take on the president. >> well, he certainly does and i'm very supportive of the speaker.

when people talk about who can do the job, who is the most electable, you know, none of them are perfect. newt certainly has some baggage and his opponents are bringing that out and quite honestly though, i think a goo comeback for him is, you know, less than perfect suit is a heck of a lot of better than an empty suit in regard to running this country. i think newt gingrich is very electable. he has spent a lot of time in congress, working with within congress, indeed second in the line to the president for four years. i think he is the man for the job but whoever it is, i can assure you, that this member will get behind 110% because we need a new president. >> phil beginningry, republican member from georgia of the house of representatives. thank you. >> thank you very much.

>> and today, the day after his state of the union address, president obama is taking his economic message to several key political states. he left this morning for iowa and over the next three days he will also travel to arizona, michigan, nevada and colorado. c-span has live coverage of his stop this afternoon in cedar rapids. it started a couple minutes ago. he is stopping at a conveyor belt plant in iowa and you can see it now on c-span. most republican presidential candidates are in florida campaigning for next fuse's primary there. mitt romney was in orlando, florida, this morning. he heads to miami for two campaign stops this afternoon. with a cuba democracy event at 2:20 eastern. newt gingrich began with two

appearances in miami with a lecture on latin american policy at florida international university. this afternoon he heads to cocoa, florida, for two campaign stops to talk about the space industry. that is 5:00 p.m. rick santorum was in naples this morning. he will be on the miami-dade college campus to talk with voters that is his last scheduled appearance. ron paul returned to texas after the monday republican debate. he has no scheduled stops today. he is hosting what is being called a space coast town hall meeting to discuss his plan for the u.s. space program. live coverage starts at 4:45 eastern on c-span.

>> senate homeland security subcommittee looks into management issues at arlington national cemetery this afternoon. investigators found people buried in the wrong place, unmarked graves and misplaced headstones at arlington. an investigation of other military cemeteries found similar problems. we'll have live coverage of this afternoon at 2:30 eastern. also arizona congresswoman gabrielle giffords has resigned from the u.s. house. with a standing ovation from her colleagues more than a year after she was gravely wounded by a would-be assassin. she formerly resigned after a series of tribute from her colleagues today. she is stepping down to focus on her recovery from a gunshot wound to the head. see the tribute and read her resignation letter on our website, c-span.org.

>> live picture now from the u.s. capitol. senate radio tv gallery. senate leaders are holding a news conference this afternoon to call on republicans to join them implementing the president's plan for economic fairness for the middle class. it was part of president obama's speech of the state of the union speech last night. expected to speak, senators harry reid, richard durbin, charles schumer and patty murray. we're expecting live coverage of this in just a moment here on c-span2.

[inaudible conversations] . .

>> [inaudible conversations] >> [inaudible conversations] >> again, life in the u.s.

capital radio county. holding a news conference asking for republicans to join them in implementing the president's plan for economic fairness for the middle class, 18 the president repeated last night during is state of the union address. from "the associated press," former connecticut u.s. congressman christopher shays is making it official. he is announcing he is a republican candidate for the u.s. senate. he made his announcement today in the old state house in hartford. his top competition for the gop endorsement is the former wrestling executive linda mcmahon. there are three other republicans and three democrats also hoping to fill the seat now held by the retiring u.s. senator joseph lieberman, who is an independent.

[inaudible conversations] >> [inaudible conversations]

>> [inaudible conversations] >> [inaudible conversations] >> he was with us a minute ago.

[inaudible] >> where do you think he went, adam? he can take care of that serial. how did that press conference go between my office and up here? >> great. [laughter] when the president finished his speech, i leaned over to senator durbin, and i said this very serious as i could. i really enjoyed this speech. i think that it was a speech that was a clear call for us to come together, and we stare --

restore fairness to the country. too many families in the fat and across the country to wake up every morning wondering why the opportunities for them and their children are so scarce. and then they look at the top 1% and find out that they have a tax rate that is lower than what they pay. no wonder the buffet rule has become well known, because it's so easy to understand. why the wealthiest among us are paying a lower tax rate than the middle-class, and by the system seems to be rigged in their favor. we believe that the middle-class americans are sacrificing every day. and it's only fair to ask why people making millions should pay their fair share. so i agree, and we agree that

president -- president obama's call for fairness in our system. we have much to do this year, and when we have many challenges to face. but nothing is more important to congress than reducing income inequality. this isn't a radical proposition. as president obama said last night, it's common sense. the issue is going to be at the forefront of the debate all year we have. republican presidential front runner is a perfect example of what's wrong with the tax code. individual who makes in a two-year period $43 million pays a tax rate of less than 15% suggests that maybe things need to be changed a little bit. americans across the political spectrum, independents, republicans, and democrats agree that the wealthy should contribute more. the only question is whether

republicans will stop listening to the tea party and start listening to the american people. if they do i'm confident we can meet in the middle and move forward this year with common sense solutions to address income inequality in our country. >> i think president obama, his state of the address, touched on something that the overwhelming majority of american families already know. they are working harder and falling further and further behind. they did a survey recently and as families that were working if they could come up with $2000 in 30 days for an emergency. almost half could. that's a sad commentary on working families across this country who are struggling to survive, and when the president spoke to the issue last not he spoke to something that resonates all across the country. people understand what's going on here. it is a matter as republican critics would say, paycheck envy, or class warfare.

it's a matter of reality. the president spelled it out. if we don't have a fair tax code, than those at the top were getting off the hook are going to add to our deficit or make it more difficult to provide the most basic services we count on in america. and those at the other end are just going to have to pay more. that's just unfair. what the president suggested last night, a 30% minimum tax for those making over a million dollars a year is not an outrageous amount. by historic standards it is a moderate amount compared to those rates that have been charged in the past. and we had to be certain that whatever we do helps those in lower and middle income categories be able to make it paycheck to paycheck. that's what extent the payroll tax cut was so important, although they can be pretty hot political issue for some period of time. and i just want to add one thing to what the majority leader said. when he came to the front runner in the republican race for presidency, if we have reached a

point in america where it is considered normal and expected that american business leader opens a swiss banking account, or invest in notorious tax havens like the cayman islands and bermuda, if that has become normal, i think we need to have a new normal. most american businesses struggle to keep their businesses open and profitable and hire local people to make them work. and the notion that highfliers can earn over $20 million a year, pay less than 15% when it comes to their tax rate, and we're not supposed to raise that as a matter of policy? of course we should. it's our job to do. the president is leading us in the right direction. the american people need to face in this election. it is a clear contrast and clear choice. >> thank you. i thought the president knocked it out of the park last night, and our republican colleagues as

shown by the muted response, we don't know what to do, and talk about morning in america, the old reagan optimism, the republican speaker last night, mitch daniels, talked about americans must talk about the state of the union as grave. so, we think we are in great shape. we are in good shape. if you are wondering what our agenda will be this year, you pretty much heard it last night. the presidents blueprint for restoring economic fairness for the middle-class will be the basis of our agenda for this year, i could president, together with the present we will focus like a laser on the middle-class, make no mistake. this is a president who has not given up on governing in 2012 as his speech issue. the president understands the middle-class is at a crossroads. he isn't going to wait for the next election to be his champion. the speech he gave was a little

clinton ask, focus on the middle-class with lots of proposals across the board, some requiring legislation, some not that would help average americans do a little better. that is what we should be doing. and don't underestimate the chances of congress to enact parts of the presidents blueprint. republicans will not go along out of a desire to cooperate, but they may find they have to out of political necessity. the republicans have spent the last three years opposing the president at every turn for political reasons, but they may find this strategy only takes them so far this year. the payroll tax debate last year showed this strategy has its limits. it showed that if they take their strategy of obstructionism too far and make casualties out of popular middle-class priorities, they will be faced with political backlash. so, don't be surprised if

election year pressures in 2012 may push republicans to cooperate with this president more than they might be planning to. otherwise they will find themselves on the wrong side of the middle-class again and again. so, we intend to touch -- test this theory out by pursuing major chunks of the middle-class agenda. we are going to push straight proposals to create middle-class jobs. we will defend medicare, and we will pursue tax reform that makes sense for the middle-class. i for plenty of republicans repeatedly called for tax reform. but the idea of tax reform is simply to cut rates for the wealthiest americans. that's their impetus. that's their goals. when republicans say tax reform, it's often codewords were simply reducing taxes on the wealthy. tax reform after the presidents speech now has a different definition. we intend to pursue a different

kind of tax reform that borrows from the president's proposal. for instance, we agree with the president that makes the sense that a millionaire should do a lower tax rate than his secretary. so it's a priority for us to act on some kind of romney -- i mean buffet rules this year. the president propose more details that could shape this proposal which improves our ability to bring it up in the senate. we agree it's unfair for some corporations in this country to be able to exploit loopholes in the tax code and escaped any tax whatsoever. we're going to look at the president fix on that. next we need to address the so-called bush tax cuts which expired this year in a way that puts the middle-class first. this means letting tax cuts we can't afford, like those for millionaires and billionaires, laps on the schedule at the end of 2012. we also need tax reform that stops rewarding firms that ship

jobs overseas and instead helps those that bring jobs back home to america. so tax reform has a new definition since the president's speech. the kind of tax reform that puts the middle-class first, with a key component of the presidents blueprint, and will be a component of our senate agenda this year. and don't under estimate our chances of success because the payroll tax debate as shown republicans it is a price to be paid for opposing middle-class people on issues of tax fairness. >> well, i thought last night that the president laid out a very clear vision for building the country that really works for middle-class families again. you know, for far too long policies in this country have really wavered the wealthiest americans and the biggest corporations.

loopholes and gimmicks have really piled up in our nation's tax code and brought down taxes for the rich to the lowest levels in modern history. it allows some of our biggest corporations to to avoid paying taxes, or in some cases even getting subsidies pretending -- for sending our jobs overseas. while the richest americans got richer, the middle-class is who has been left behind. our schools have suffered. our roads and bridges have crumbled. and far too many of our workers and small business owners are suffering from an economic collapse that they didn't cause. it's wrong and it's the result of a failed ideology that doesn't believe that government can have a positive force for our middle-class. it's an ideology that continues to be pushed by republicans whose focus above all else here on cutting programs that are families depend on, eliminating support for the middle-class, and ending investments in the future of our great nation.

their voices may sometimes be the loudest here in washington, d.c., but they are not the view of the vast majority of americans who understand that the investments that we make have been a positive force in our nation's history. so i'm proud to stand with my colleagues, and join with president obama in saying we are not going back to those policies that have devastated our middle-class. we have worked very hard to bring this economy back, but we need to do a lot more for our middle-class to get us on our feet. we've got to make the investments in our communities, in our workers, and our families to move forward as president obama called on us last night to build an america to last. so i'm proud to stand with the senate democrats and moving that agenda this year, and to fighting for those people who need our help and support right now to make this nation strong again. >> are you going to encourage

your party to made in corporate -- [inaudible] >> i think realistically, i don't think that's a place for tax reform. we know we have to do tax reform and we'll be hearing from that regard, but we know we have to do tax reform. i think there's some who think we can do it on a bipartisan basis, the payroll tax is not the time to reform the tax code. [inaudible] >> we've already already voted on that in the last couple of years. certainly that will be part of what we did with tax reform. and if the senators want to vote on that issue standing alone, we will perhaps have that opportunity, but i really think it would be appropriate that we

approach this quickly, to have tax reform, not doing rifle shots. we've already voted on it in the democratic caucus stand strong that they should be some change in the tax structure. >> when the democrats controlled both houses, nothing was done on -- i don't think any suggestions that capital gain tax rate or different tax rate increase. so why are we taking the buffer rule stands now? >> i think all you need to do is -- former governor of massachusetts tax return and that indicates what it's become an emergency. absolutely we should do it. [inaudible] isn't that a bigger issue

though? >> senator schumer talked about that. he mentioned in his statement here today that there's some who pay no taxes. of course, that's wrong but that doesn't mean we can only do one thing. yes, what he does is improper. he may follow the tax code but it's not fair that they have the brakes that they do. and this implies to somebody who makes $43 million in two years, and paid less than 15% in taxes. >> the president also talked about a sort of new rule that would require an up or down vote on judicial nominees. given your past statements on this issue, i was curious if you could talk about that? >> i think we have to look at this nomination situation. i think it has really become, for those of us have been innocent, even, even for a short period of time, how it is simply come to a point now where you have a republican senator, at least the way i just did, i

think pretty clear, that they will approve no new judges. what is that supposed to do? i think we do have to take a look at the nomination process. it is not working very well. we tried to do something on secret holds but that hasn't helped much at all. and i just think the system has to go back to where it used to be and have a little collegiality, and not be forcing us to cloture vote's on trial covert judges. obviously, i see this, i do not think a majority of the republican caucus supports what the republican senator said on the floor yesterday. it has been very clear going back to the gang of 14 or however many there was, that they simply said that we should not filibuster any trial court judge unless there's unusual exploiter circumstances, and certainly there hasn't been any.

>> as a follow-up to that, the judicial nominations -- [inaudible] the other piece of that was in regards to the conflict of interest, is that senators or congressmen who have shared space and the companies come before their committees, that they shouldn't have -- [inaudible] do you think that is something unreasonable? >> it's just common sense that if you have holdings in a business, a corporation stock, you shouldn't be voting on in that regard. it's only common sense. and i'm disappointed it's going to take a lot to change that but i'm happy to support such a law. [inaudible]

>> we believe the payroll tax extension is extremely important for the economy. as the president said last night, why should the average guy pay $40 every week extra because the republicans are not willing to extend the payroll tax holiday that we have? they have said the right things publicly, but we will see. i talked to my country's early, some of them yesterday after they had help in opening public conference. and i was somewhat surprised the rhetoric they came from the house. it didn't appear there anxious to do something. but i think with all the statements their leaders have made, that we will get this done and i hope it's done quickly. >> one last question. [inaudible] >> no, i don't. but i'm tremendously interested

because as you know, nevada is the number one foreclosure spot in the country. i just spoke to secretary donovan several times in the last few days. is going to nevada since the maybe he will get helped set a. i told him i hope something is coming very quickly. thanks. >> as this briefing wraps up, president obama is on the road today, and for the next few days pushing his support for the middle-class that he spoke about in his state of the union speech. right now he is wrapping up a visit in cedar rapids, iowa, at a conveyor plant, and we're covering that live right now on our companion network, c-span. later today president will be in arizona. tomorrow, nevada and colorado.

and friday he will be in michigan. senate homeland security subcommittee looks into management issues at arlington national cemetery this afternoon. investigators found people buried in the wrong place, unmarked graves and displaced headstones. an investigation about other military cemeteries has done similar problem. we will have live coverage this afternoon of a hearing beginning at 2:30 p.m. eastern. most of the republican president to candidates are in florida today campaigning for next tuesday's primary. mitt romney was in orlando, florida, this morning and he goes to miami for two campaign stops this afternoon.

>> why don't we get started? i will start the way i ended by acknowledging the casey foundation. and lisa hamilton is here, vice president of external affairs representing the casey foundation. we are delighted that she's able to join us. the covers of mayors has had a long partnership with the casey foundation to support our work and our programs, the possible impact low income working families. ms. hamilton leads the organization's public affairs strategic communications, policy reform and advocacy work.

before joining the foundation she enjoyed a 14 year career at ups were mostly lacy shirt as vice president of corporate public affairs. i would like to thank the casey foundation for its continued support and leadership in this important issue. lisa, thank you for being here. let's give her a round of applause. [applause] and thank you for your support. so, we turn to our third of mayors business leaders panel, about hard-to-serve populations. let's once again, we will have, we will have three presenters now, and then we'll open up for questions and have a discussion at that point. our first presenter on the panel is district of columbia mayor vincent gray, a big fan of the redskins, which is okay. [laughter] since his team did about as good as my team this year.

mayor gray has taken an important step to fulfill his campaign promise to unite d.c., by focusing on job creation and economic developed through a collaborative approach, school reform and restoring fiscal responsibility to city government. mayor gray has been an advocate for district residents for more than 30 years through his work in both city government and nonprofit sector. he is actively sought ways to best leverage job training dollars to serve low income populations, and he has developed one city, one hire, an employer driven higher initiative to put district residents back to work. that's what we're all here to learn about, so we're very honored to have him here today. mayor gray, thank you for joining us. mayor gray. [applause] >> good afternoon.

i want to thank mayor rawlings, such a very nice introduction, and we, of course, are natural enemies, but -- 'tis dallas and i'm washington. the redskins and cowboys, you know the drill. i told mayor rawlings earlier that we didn't want people to be anxious and upset, about the season so we took all the fun out of it right at the very beginning of the season. [laughter] there's always a method to our madness in the district of columbia. so, in any event, we hope you enjoy the weather here also. we decided that we want you to come back so we got 50-60 degrees weather the next couple of days, and as well it really facilitates you being able to go outside. and we want you to do that.

we want you to be able to spend every dollar that you have in your pocket. we take credit cards, checks, ious, and anything that will sting the our economy here in the district of columbia. all in interest of keeping people working and getting them back to work if they don't have a job. so thank you all very much. in any event, i'm going to breeze through this. the title is a leading the workforce and economic development in the district of columbia, which is a key initiative for us here in the city. when i came into office last year we establish for priorities. one of which probably everybody embraces here in the city and here today, and across the nation. that is, fiscal stability. we actually a one point had a fund balance that was the envy of the nation back in 2007. witty fund balance of $1.6 billion, which was phenomenal at the time. it got spent down in huge chunks to the point where we were

projecting by the end of this past fiscal year of september 30 to be at the point of having only about $650 million left in our fund balance, none of which did we have any control over because half of it was committed to our bond escrow fund, and the other half was committed to a contingency reserve fund impose upon us by the congress. and for those of you who don't know, the district of kobe has to present its budget and all its local laws to the congress to be approved. now isn't that fun? [laughter] we actually i think have a better track record than some areas than those with the our overseer. but maybe today will come when we are free from the bonds but in any event, we also recognize that in addition to fiscal stability, one of the things that would bring that about is focusing on what was a huge unemployment rate in the city, a

stalled economic development effort, and be able to get people back into jobs. and so, just by way of background, give you a little bit of a flavor of the district of columbia, we are 66.3 square miles which means we are not very large. we have a growing population. in the decade between 2000-2010, the district of columbia group from 570,000 people to 601,000. so over 10 years a total of 31,000. but in the 15 months since we have actually grown by almost 17,000 people. so we have grown by more than 50% in 15 months of the growth it took place over 10 years. so we are on an escalating path, and clearly that presents opportunities as well as challenges, again, in terms of employment. during the day we have about one many people who are in the city. we have in the metro area, which

includes of course areas of maryland and virginia, approximately 5.3 million people. i think we are the only place in the nation where whatever suburb you go to you are in someone state. that doesn't exist anywhere else. in addition to that, we have a huge range of income. median income years $55,000, but we have people make lots of money and with other people who are down in the 15, $20,000 range in an area like the district of columbia, it's almost impossible to deal with. and then one of the biggest areas for us is of course tourism, and we have about 16 million people who come to the district of columbia each year, which is phenomenal. so keep coming and bring a few people with you when you come. in terms of the problems for us, the unemployment rate, again,

has been huge. until about september we had an unemployment rate in the city of 11.2% which is one of the highest in the history of the district of columbia. and we've been working on this, and some for focus here, the department of employment service, lisa miller, director of business, david zipper, our workforce investment council director alison, issue. and we've all, we tried to reorganize ourselves. i will talk live it about that and be happy to talk more about the and aftermath when we have more time. but we tried to organize ourselves to really refocused and repackaged our efforts. so actually by the end of this year, by the end of december, through a number of efforts we've made, and some of the things that probably were serendipitous, our unemployment rate has dropped by six-tenths of 1% which is a huge drop forced to wear down to pin point 6% and actually -- anxiously

awaiting the data to see what are. but the reality is that our unemployment is concentrated in three areas. we have eight wars in the city, warts five, seven and a with the unemployment rate is respectably almost 40% am almost 17%, and then ward eight where we have large pockets of concentrated poverty when we actually only, 76% of the people who live there our renters can where we have some of the largest areas of development. array, unemployed rate is 24.9%, which believe it or not is down 30% about six months ago. among low income d.c. youth, and i suspect for those who are in large cities, this is probably a picture that reflects where you are, too. 40% of our unemployed, 40% of our young people aged 16-24 our unemployed, and not in school. we have 68,000 residents start

post education. there's a lot of verbiage and numbers up there but let me try to summarize this the best i can. our job growth now appears to be accelerating, we are trying to do everything we can to control that. we will talk on the bit about that to the extent we can to job creation. and nation lost, in 2011, the nation lost almost a million jobs. we actually gained about 9500 jobs which is good for i guess any jurisdiction in america at this stage. we're expecting over the next four to five years to be able to see through attrition as well as new job creation about 138,000 jobs that are to be filled. and many of these jobs are ones that don't require anything more than a two-year degree, or less. they are problem for us like i'm sure many places in america is that despite increasing job growth, our unemployment rate is

very high because with so many of our residents who simply don't qualify for the jobs that increasingly are becoming available. we are focused on two strategies. one is a short-term set of strategies, and some of those are the same strategies projected out over a period of time. our once he won higher program is at the heart of this effort. in addition to that i think we are the last jurisdiction in america to have created a community college. we have one now that is part of our four year college, university, district of columbia. we are moving rapidly to be able to separate the two because they really have different missions and, frankly, the enrollment out in the kennedy college even though it's been a place only for a couple of years has already exceeded that in the four year college which is where we can more rapidly prepare people for jobs. and in addition to the, the longer-term strategies include

something that we focus on now for several years in the city and that is education reform, and expand early childhood education, trying to get along the. there are jobs that are avail in early childhood education, but the larger purpose for us is to try to create a cadre of young people who would be better prepared when they go to school, who will get a better education as result of it. and 15 or 20 or so now will be young people who achieve at higher levels than some of our young people are now. i think we are, if you know differently let me know, but i think we are the only city in america that has universal prekindergarten. every three and four year old and the district of columbia whose family wants him or her in the program can go to a d.c. public school, a charter school, we now have 53 charter schools, 99 campuses and 32000 students enrolled, or a community-based organization. that was an initiative i get to the council was chairman of the council, and we are now working on the rollout which what we do

it in a few weeks, of a universal infant and toddler program which will focus on young people, birth to two years of age, to actually come to that what we're doing with preachy. until a lot of people if i could out how to get a fuse into a program i would do that because i think it makes good human and education since and it makes good financial sense as well when we think about the cost of young people who don't have those opportunities early in life. one city, one hire, i think of a brochure before you on that, it's a program that we established that is being run out of our department of employment services under lisa mallory's direction. it's a kind of a simple concept. the idea is that we work hard to work with employers, to identify job vacancies as they exist, and then we work hard to find out who need to job and we tried to make some guarantees, a

commitment to employers to work with them. the transixteen which is a whole group of people that work in our employment services department, they establish one-to-one relationships with the employers. they work with them to build a customized staffing, plan with them, a service plan that includes recruiting, screening, of candidates. and then the third step, employers than get people who have been prescreened that are available to be hired by them. we offer a host of incentives, but three and a half months, i guess it's three and half months since we've had this program underway, we have already signed on i think it is not 363 companies who are working with us in the district of columbia. we have placed 1500 people who were unemployed prior to becoming part of this effort and into employed. and we have another 314 who are

in the queue. to over the next several weeks we could be approaching 2000 people who were unemployed, now will be in kashmir now be employed. what kind of companies? bank, 7-11. some of our construction firms, marriott, cbs, bed bath and beyond, our universities, some of the security firms, safeway. and, of course, our own mattresses and. one of the things we found out is our metro system that serves the city principally, only 40% of the people who worked for metro actually lived in the district of columbia. so we have now worked with the metro system. they are 360 vacancies a year in the bus system. so we now were, entered into an agreement with them to help recruit and train bus drivers so that we can increase our market share of people who are employed in america who live in the district of columbia. 70% of people who we worked

with, who we refer to employers have been hired by those employers. a good success rate and thus far. we also are working, we worked to reestablish our work force investment council, which really was essentially done when i got here. it was nonfunctional, completely. we worked hard to recruit people from business and labor committees in order to be able to provide the leadership. we not i think 30, 35 people who run the workforce investment council. mike herald was a senior vice president, executive with pnc bank is leading it, brings and he knows amount of energy and expertise and intellect to that position and is working with allison in order to make this the centerpiece of our efforts to get people back working again. we also, and you'll see a graphic of this, put together a number of agencies in the city who should be working in a linked way with our workforce

efforts to bring them closer together. and what you see there in the photograph, that is -- they came to the district of columbia a few months ago. we are able to talk them into working with us, and what they did was they gave us the responsibility for recruiting and screening and doing some pretraining of people. they hired 65 people to open that store, all of whom are district presents. i think 40, 45 of them were unemployed at the time that they were hired. >> we also are focusing a lot on expanding our economy. we are principally and economy that is focused on tourism and government. at one time, several decades ago, government and the district of columbia represented 60% of the employment picked a leader or not it is down to 12% at this stage. and i suppose with the prospect,

sequestration, that probably bodes well for those of us who live in this area. but one of the things we are doing is creating a workforce, for those of you have a copy of this is on the previous page. workforce which we work with our city council to create, actually establish a permanent way of connecting people who need jobs with employers, and he will be a separate entity altogether that will have its own staff that would be coordinate as part of our workforce development efforts. one of the areas we are focusing on in particular is technology, and we've really worked. i want to single out david sipper who has worked so hard in that area. these are some of the firms, living social which asked is becoming rapidly the largest employer in the district of columbia. they hired three people, average of three people a day. in the district of columbia. they were about to move out of

the city and we worked with him so that they would stay. we are now working with up to five permanent quarters so they will continue to be a part of the city's efforts. the one down in the lower right hand corner, the fort, this was an amazing story. david and i were just talking about that. they were in sterling virginia. they're about to sign a lease in early virginia to locate in arlington, virginia, and were able to work with them to get them to come to the district of columbia. we give them $100,000 in incentives. they have now located in the district of columbia. they are an accelerated. they are an incubator of technology firms. they now have a think about 10, they have already signed on. they have found their headquarters, and by the way, this is about as good as it gets. you see where the words the fort is on there. and that is the district of columbia flag. so that is about as good as it gets. if we can do the rest of the

folks to the same kind of thing, we will really be called. the last one i will mention is new brand analytics. new brand analytics is on his way to california. they are a firm that has some very interesting apps. they are engaged in. we worked with them. they're going to stay in the district of columbia. they are expanded, and our goal frankly us to build upon what is a fledgling technology a renewed and bring more jobs here. we have about 20,000 jobs now. we don't have a numerical goal but i would love to see that doubled over the next four to five years. this gives you an idea of how we're working with the workforce investment council to focus on these issues that i've talked about, the seven agencies that are listed there. we moved the workforce investment council into the deputy mayors office to elevate the effort. the rest of those are the community college. we i should have a state agency for education in the city. our juvenile justice issue, they

now have a big grant from the department of labor to try to take some of the older you are in the juvenile justice system and to the charter school that we operate within our juvenile justice system we try to prepare young people for jobs. the next one is a disability agency and addition of climate that works with a whole range of disability. the department of human services where we are focusing intensively now on getting people back to work and, of course, our department of employment services. and so, that having been said, we think the one city, one hire program is beginning to show some real results. when you can get close to 2000 people in three and a half months, we believe that has some real potential. and it's a very, very simple concept i think they can be used almost anywhere in the country. we know where the unemployment areas, where they are to concentrate in the city, especially around areas of high poverty, high unemployment and very low economic development.

didn't get a chance to talk of economic development much in this presentation but we now have launched 14 projects in the last 12 months ranging from some very small, something like city center but if you happen to be in the downtown area, you will go past this project that is a creator at this stage, a six-story hole in the ground. that ultimately will be about a billion dollars of development. qatar, a huge investor i in the project. that will result in what, several thousand construction, 3700 construction jobs, 5200 permanent jobs when it is finished in three years. and so that will be a big part of our strategy as well. and so, in a bad economy, we are making the best of it. and i think we're beginning to see some light at the end of the tunnel as well. again, we are focusing on the short term strategies as well as the longer-term ones.

longer-term ones focus on two areas. reorganizing our whole workforce develop a system and using economic development, especially through technology and working with our education system to prepare our young people for jobs. there was a slight up there and i will stop after this, there was a slide out there that i should have -- is a brand high school we just opened in the district of columbia in ward seven which is an area of high poverty concentration. this is a stay in school. science, technology, engineering and math. we put $120 million into building that school. it opened in august of 2011. and it will be a focal point of the efforts that we make to train kids for jobs, especially in technology. thank you all very much. i look forward to any questions when we get to that point. [applause] >> our next speaker is madison

mayor paul soglin, he was reelected to his office on april 5, 2011, after a 14 year absence. he began his third tenure at the city's chief executive. mayor soglin has worked diligently over his term as mayor to achieve considerable success in managing the city's resources, encouraging responsible growth, economic development and investing in neighborhoods. his success as there is based on a combination of strong leadership and deep respect for his management team and public employees. he told me, and it ago he believes in the tom sawyer school of management, make everybody else do the work and take the credit. [laughter] so i think it's brilliant. and innovator in government management and administration. has lectured on his experiences and total quality management. the city strategic planning and

management systems and other city initiatives. we are decide to have him join us today. mayor soglin, thank you for being here. [applause] >> thank you, mayor, and thank you all for sharing an interest in what is such an important topic throughout this country. let me tell you what i'm not going to talk about. i'm not going to address what needs to be done in terms of engaging the private sector. that point has been covered by others and will be covered in more detail later. what i am going to talk about is my response to the question, what is your vision for madison? in the last election a woman came up to me, her son was graduating high school, and she said she had one simple request your that her son go on to a hae

a successful post-high school education, and be able to get a job in madison, the city where he was raised, and to be able to afford to live in the community. it's not all that glorious. very simple mother's request. a very reasonable one, and, unfortunately, one in this day and age is not necessarily attainable. several years ago when i was in the private sector, a friend and i were deeply concerned about the problems we saw in regards to employment training, and the fact that we didn't seem to be getting much traction, even though the city and the county and the state have made a commitment over decades for the whole day of job development, job training. so we picked an area of medicine on the southside, we call it the park street t.

parks treat, if you go too far goes into the lake. but as you go out park street to pass a couple of hospitals, leading the university, and yet into an area before you get to the belt line. not the belt way but the belt line. which all the demographics people ask about can be found. where is the area with the census tracts, with the highest unemployment. where are the areas that have the highest population of blacks, latinos. where do we have the most number of households that are below the poverty line. the area is well served. there are commitments from the private sector, from hospitals. there are more nonprofits that you can shake a stick at, probably in the tradition of madison where every member,

every resident of the community believes that they are a member of the city council. [laughter] and a mayor. but we've also got enough nonprofits to go around. and so the question is, how were these folks doing? the government, the private sector, the nonprofits, in terms of the commitment to a common goal. and i'm not going to bore you with some of the details peculiar to madison. the report is on your table, but i want to take you through it and highlight some of the areas. and keep in mind, i'll share with you that i am a big believer in public investment into areas. one is infrastructure, and the other is human capacity.

i believe that history has shown us, both internationally and in the course of this country's development since the civil war, that invest in those two areas pay off big time. and a lot of us knowingly realize that the sage wisdom from a great baseball movie of 20 years ago, build it and they will come. we think about that mostly in terms of the infrastructure part, whether it is sporting facilities, convention centers, roads, airports, whatever leads to high speed connectivity. it's also important to think about it in terms of human capacity. and if there's anything to characterize our commitment within the city management this next term, it is this.

every single individual is a resource, is a nugget. every single individual, regardless of their age, their background, their residence status, is a tremendous asset. and our mission is to create the best trained workforce. because one thing we know about employers, they are looking for that trained workforce. you heard that earlier today. now, i'm not to be so cavalier as to suggest it's irrelevant what areas that training and education. but i want to be able to say to any employer, whatever your needs, we have it. and while i won't turn my back

on some companies, that is interested in leaving one of your community and moving to madison -- [laughter] i'm really not interested in making a career of that. because one of the things that we've learned over the decades is that your best shot is developing the company locally and growing it is locally. that's where the real opportunity is. and it's there within our own communities, why waste it? why waste that opportunity for that small entrepreneur? give them a start, give them an opportunity to develop in the garage, in the basement. i mean, it's not just rock bands that start out in basement and garage. some of the best high-tech companies in this country started out in those lofty

environments. so, what is it that we learned in our study? well, if you got a copy of the report, first thing i would do is suggest you look at page nine. we saw some limitations in the current system. some very disturbing ones. that for example, the employers in the training service providers did not have strong linkage your that was a deep concern to us. in addition, we found that those who did these services, particularly employment training, we're not talking to one another. we saw that the relationship between funders, whether those in the government area or those who were giving grants, and the training providers were being polite in the report, it was not optimal. we found and under

capitalization in both human and material terms which resulted in deficits in the service system. and this was alluded to earlier, laurie from dallas mentioned this. there are several areas that must receive our attention. we can't do the employment training in a vacuum. and those our quality child care. we have the same terminology that you use. it's not just child care. it is quality child care. transportation, and i'll come back to that in a moment, one that surprised me but is very critical is financial literacy. we found too many instances where people were successfully placed into positions where suddenly buying the pickup truck of their dreams, they used pickup truck and paying 17% interest and not understanding

the difference between 17% and 7% on a car loan. or were going in with the $300 that they've saved after several months of employment to buy a television set, and walking out with a contract for $2000 worth of electronics, and in several months later not understanding why they were working saying i was better off when i didn't have a job. ..

coming back to the transportation for a moment. those of us in the cities are in a great place. we always have been. to know what, but one of the things arresting right now is that the corporations that moved out into the suburbs, out into the rural areas looking for cheap land and some wilberforce where there was not a lot of competition or the presence of one of the labor unions are discovering that as they're ready to expand they cannot get trained workers. the whole special problem in terms of the cost of housing and transportation is coming home to roost. and what is happening now is folks are looking very carefully

at the cost of transportation as they to isolate what they're going to do in terms of employment. in the cities where we have housing, resell as well as the jobs, this is the time for us to strike. if you turn to page ten there are some realities that we have to address, particularly if we are going to talk seriously about the hiring of veterans, whether we are talking vietnam-era war veterans are in their 20's. there are problems of untreated mental health and substance-abuse issues. this falls under the larger category of health care. and treated medical conditions. the challenges of being s single parent. let me just tell you.

sarah and i raised three daughters. we are still raising them. i just don't see in this day and age between after school prayer ramps, parent-teacher conferences, making sure they're is a working computer and printer is septupled, i do not understand halas and the parent does it, especially if the debt have a car. chester titian, homelessness, family -- extended family support. i will come back to that point in a moment. criminal history. let's spend a moment on this one. there are too many people with a criminal history who are not given an opportunity, particularly by some of the most important national employers.

i can understand and this city as an employer looks carefully at criminal histories, but if that crime is not job-related, and if that individual has the skill, talent, opportunity these to be given. there is worry you will find some of your best nuggets. of undocumented workers, one way or another this country has to come to grips with this issue. there are too many tragic stories about hard-working people, particularly those in their late teens and early 20's, who are trying to be part of our economy, who contribute to their community, and are not given the chance. if you turn to page 16, i want

to mention one of the tensions among allies, and this one is very surprising in our report, but that it came up, and also the candid nature of the nonprofits who addressed the subjects that is the competition between them. funders are demanding more and more accountability. they're looking for statistical reports, a demonstration of progress. it is not good enough anymore to simply say, here is our application for another grant cycle. there has to be proven results. now, i am not for a moment suggesting that we turn our backs and to not insist on accountability.

but we have to deal with some of the ramifications and consequences of the composition, as we are finding that agency and the competition for funding turning inward and are not pardoning with other agencies where they should be on the same page. they do not want to share the success. i share my success with you, you, in turn, will be able to use that and utilize it as we compete for the same funding dollars. i don't have the solution to that. this is something relatively new that we have found, and it is something we need to address, but it is out there. if you turn to page 18 in the report usc a reference here to case managers and job coaches.

this was addressed earlier, but i want to make one important point here and think about the experience of the college-bound students. the college -bound student probably had a cadre of pierce in high-school that were college-bound. college-bound student had parents who were committed to that education. the kid get to school and went into housing situation where everyone was in college. there were probably more academic advising gains indicated shake a stick at, and so everybody is aligned and providing a support network for that kid. yet almost one-third of our enrollees for college flunked out. then we take a kid, comes out of an environment that is not that supportive, and we put that into

a job training program, but that kid into a two-year college program. then when the kid points out we suggest he/she is unworkable and not appreciative of what the community is done. that kid needs a support system. kidneys a support system, whether that kid is 19 years old or 39 years old. the lasting a want to share with you is some of the findings to you will find on pages 23 and onward, and i want to get to this final thought about the connection in terms of transportation that i mentioned earlier. this is where we're focusing right now. we are looking at where we can go in terms of looking at

employers some of the population we're trying to serve, and get everyone connected. they're seems to be a very difficult and challenging job, but at the same time at least an urban areas with public transit we have an opportunity to capitalize on that infrastructure and address that particular importance element that the individual and family needs. so, thank you very much. [applause] >> thank you. and our last speaker on this panel, as senior -- single federal policy lead for microsoft corporation on education work force redness and immigration-related issues. before joining microsoft will work for over 30 years in the district in a variety of public policy jobs, including ten years as staff on the house and senate education and labor committee.

he also spent seven years in the clinton administration at the department of labor where he led the department's legislative efforts on the work force investment act. thank you. [applause] >> thank you, mr. mayor, for that introduction. i am proud to be working with your team in your department of economic development, supporting one city one hire with the digital literacy curriculum but we hope to announce. has been a pleasure. the name -- the mayor steam is right on and very open and friendly, and we appreciate that at -- that opportunity. i have get shafted of the

national association of work for sports. i will probably not get to come to the next board meeting. a pleasure to work with you every day. and here to talk to you about two initiatives. i messed up and did not bring in of handouts. kathy has been jennet -- generous enough to say we will give you all stock copies. one is around our efforts implying veterans and the other is called ship the future. the green sheet. and that is going to work you through a little bit of why we are involved. thank you, seattle. more importantly, we have 150,000 partners around the united states. almost all of those partners of 50 employees and less. if that ecosystem is not working press then microsoft is not going to survive, nor will all of the companies that work in the itunes sector, because they are all in a similar boat.

right now we have met, as the company, 4,000 job openings and are hearing like crazy. we need moist rembrandts, computer science folks, whole range of folks you please check our website out. it would love to have more applicants. more importantly, when we look around at what we can do to be helpful, as we see government move to a new mode, as we seek federal resources shrinking, state and local resources shrinking, what are going to be the appropriate roles for the private sector and working with the public sector with a full work? where can we help bring things to scale? where can we bring out private sector expertise? we are open for business. want to try to be helpful because, again, this is not about microsoft perce, but it is about the future of this country , where we're going as a leader in innovation, and if we don't grow and maintain these jobs in the u.s. we're going to have a very difficult quality of life to maintain of the next 20-

30 years. we have been in this game for a long time. quite frankly it is what got me and other governments. we do, in fact, make investments in work-force development and education. we love partner with all of you on an everyday basis. let me just tell you about why we get into working with veterans. very simple. amelya and minna element coming back from conflicts abroad. many of those are, and pets, much younger men and women. many of them have not had the same attachments to the work force. many of them did not have the educational attainment levels we will all like to have. yet there all workers that we want to have. so what we need to do is obviously help the transition from their military careers into civilian employment. it sounds easy. well, if you are a sharpshooter, what will i translate that into? if you are a and injure people person, or lots of other

occupations that are part of the deal declassification are not such an easy thing to do. a lot of folks need to sit down with counselors, lots of different of types of help and support services. working around the country in six communities, said diego, panama city, the bronx, new york, charlotte, and bills yet, washington, to try to, in paris, provide those transitional skills to these ten men and women so they, and beckham can be part of our civilian labor force moving forward. we know that is absolutely critical. recently we just announced an expansion with president obama were we will give out 10,000 additional free vouchers or online training in a variety of test feels so that you can become certified at whenever you like because we know that there are jobs to be had in these communities around the country, and they know that they don't start at minimum wage, quite frankly, ladies and sullen. those 4,000 jobs, the average starting point is $100,000 of

our company. so, if we are looking to see where the jobs are in the future and how it can help young men and women, we think these are the highest paying jobs and the ones that are most available across a broad spectrum of communities around the country. the other thing we have developed, something called a decoder. i talked to you about the sharpshooter earlier. how does it figure out what job he or she may be qualified for? we developed something called the military decoder. the sharpshooter puts their military classification in to appeal the computer, and we will tell them what jobs are qualified for at microsoft. we want to bring that to the federal government. we think we can bring it to state and local governments and what to shared with other companies have because it really is a series of ways that we can make the transition easier for these men love and moving forward because we know, and few have ever had the pleasure of talking to any of these men and women, they will impact you. the challenges that they have overcome have been different

kinds of wars, and these are younger kids. they really, really have been through a heck of a lot, to put it bluntly. again, if you have ever had the honor of having a conversation you really do realize is, not only do we of these books a debt of gratitude, but we know that there will be super workers moving forward, dedicated, on time, no how to dress, distention of command, understand a lot of things that employers are looking for every day. that is why we are huge to undergoing a huge recruiting effort in the hundreds trying to bring in folks from washington state where we have a lot of military bases and deployments. we hope under to other companies will follow suit. this second program want to briefly talk to you about is something closer to the future. quite frankly, we really believe in this century there is an opportunity. on one side people have access

to the a genet, the broadband, quality education, and jobs and quality training opportunities. those communities are doing well or have and opportunity to do well. on the other side of that divide is quite a different story, unfortunately, ladies gentlemen. we know that if you don't have access to the internet your community's economic development prospects dip precipitously. you will have higher unemployment, lower tax base, is a case in which is often obviously funded by your tax base which is out of equality we will like it to be. then you have much higher rates of unemployment, and jobs that are not going to be family wage jobs with career ladders. and the only way we're really going to, we think, and we have none of chairman of research on this, tackle this opportunity is to try to figure out how we can work with cities and communities and states around the country to allow for young students to have

access to internet, to have fully loaded devices, to have access 24 / seven in their community to broadband so that, in part, they can keep up with the joneses in the suburbs and in other places around the country where that access is more readily available. we are committed over the next 44 years to reaching a million kids. who would love to do more. it's all about city leaders, bringing stakeholders together to mention that service providers. school, library, hospital. we can create wireless messages so that kids don't have to pay 20 or 30 or $40 a month. they can pick up the internet and wi-fi for free if they have a device. so, they can become gamer's or developers or small entrepreneurs and we will encourage that and give them the tool to do that, but unless we let these kids get in the game and unless we bring their parents into the game that economic and opportunity divide will only grow larger as we see

them more and more jobs in this country require it fundamental underpinning of this older see skills. we know the percentage is right now or in the fifties and 60 percent of jobs that need those skills. if you look five mission now, ten years from now, the demographers and the future and what they predict, 70-75 percent of these jobs at the end of this ticket will require college. without that education, without the skills training these and people are relegated to second-class citizenry. we need everyone to pull together, and we all have a stake in this. we're ready to work with you. the total cost is over a trillion dollars a year. lower taxes, higher prison costs, health care costs, other social related costs, a trillion dollars here of the city's we

will charges are working in first. anybody else? come one, come all. we're ready to take you want. work with us, partner with us. the birmingham, chicago, houston, los angeles, new orleans, northbrook, philly, portland, raleigh, san diego, sentences, san jose, seattle, st. louis, tampa, tulsa, and, of course, washington d.c. that is mime message, ladies and gentleman. we need to help our best, and we know how we can do that. look forward to partner in with you. you will bring solutions to your digital literacy problems. was the glove how we can level the playing field.

but for to working with you. [applause] [applause] >> great perspective. questions? parts? the number you gave, whatever, that was because we are now wired? >> yes. it is a trillion dollars. if we did what we would save a trillion dollars? "what we need to do? >> make sure that kids have access to the internet and folks have access to the broad band at home in their communities twenty-four's us seven. >> got you. dougie. other questions? well, thank you very much, news panel. >> i could make it later. >> you are not a provider of internet, how do we get the providers on board?

they are looking at giving their products away for free. >> one of the things that we are very fortunate, we work with a lot of providers. some will play and some won't. that is okay. who will play with the ones who want to play with us. we are confident. having already talked to a number of smaller providers, nbc and comcast partner in a big way. i think you will hear about a number of other employers partner in with the global initiative on this piece, so absolutely you are not an isp provider, board we laid pipe, but we believe we have enough force in -- working relationships that we will work hard to make sure we pull all the partners together with your lead. >> thank you. i did not see dallas a list. >> i know. [laughter] >> of want to be on every list. all right.

thank you very much. our fourth panel -- let's give a big hand. [applause] >> pictures of president obama earlier today. he is on the road today and for the next few days pledging support for the middle-class, this will tour marks in phoenix arizona after a stop in cedar rapids, iowa earlier today. tomorrow he will be in nevada and colorado and friday he will travel to michigan. [background noises]

>> the federal reserve says the economy is growing only modestly, so it is keeping interest rates low. a likely to raise key interest rates before late 2014, and it has kept its key rate it near zero for three years. to reserve chair ben bernanke is holding a news conference right now answering questions about the decision. c-span is airing it live mendicancy it on c-span.org. and live pictures from the dirksen senate office building this afternoon. surely it will bring you live pictures of a hearing on management and military cemetery based on their review of conditions at arlington national cemetery here in the nation's capital. live coverage of that beginning in about ten minutes here on c-span2. >> the fact is that the legislation we are considering

today is an earmark that but that's just one project. you remember the republicans saying they were against their markets. well, not when it helps their friends. and the arguments for the project just does not stand up to scrutiny. this pipeline won't boost our energy independence or lower gas prices or create the jobs being promised. they say will make it compass -- country more energy independence. that is a myth. oil prices are set by the global market. this pipeline will have no impact on our vulnerability to price spikes were iranian brinkmanship. in fact, keystone won't even reduce our imports.

will simply allow canadian oil companies to use the united states as a conduit for shipping overseas to china. no, no they say that if they don't get this pipeline they're going to go to the west coast. well, that is a problem because there are nations in canada who don't want this pipeline going in that direction, and it's not so clear that you would get the approval to do that. the republicans say it will cut gasoline prices. the opposite will happen. canadian oil that is now being refined in the midwest and suppressing prices in the market will be diverted to the gulf coast for export, costing consumers in the midwest billions of dollars. republicans say they support the pipeline because it will create tens of thousand jobs. that is not right either.

according to transcanada, the companies seeking to build the keystone xl pipeline, the project will have a peak work force of approximately 3500-4200 construction personnel. some labor groups have recently described the gop's antics on keystone as the politics as usual strategy of a do-nothing republican congress. if the republicans were seriously and actually concerned about jobs that would work with the president in passing his jobs bill. they have no solution for the jobs crisis. the jobs crisis, they say, must be fixed by tearing away regulations to protect public health and safety. we will have more jobs if we let billionaires' keep more money. it will trickle down. and then they say this one project will provide the jobs we need.

it is amazing to me. the fact is, the legislation we are considering today is one that is hard to understand. we asked the brothers whether this was -- this committee has an obligation to understand the benefits from this legislation. last year news arias this is reported that one company will be one of the big winners if this pipeline were constructed. we asked whether this was true and was told they have no interest whatsoever in the pipeline. then we learned that they told the canadian government that they have a direct and substantial interest, something does not add up. i understand this situation and the requests that we a bright -- invite the brothers to come in

and testify. the charity is not even responded to our letter. therefore, mr. chairman, i was hoping under rule 11 of the house rule to have a minority day of hearing. is important that we hear from stakeholders. i think this pipeline is a bad idea. it ignores the concerns -- >> the zimmerman's time has expired. also tell the zone and the we will accept the letter and we will follow the rules, but we are not going to be subpoenaing them are asking them to appear because they have nothing to do with this project. at this time i would like to -- >> a point of order, you have made a statement where you were a lot recognize, you cut me out in the middle of a sentence. i would like to know the substantiation. >> your time was up, mr. waxman, and we're going to recess this hearing for ten minutes and then come back. >> a you calling the pope

brothers during recess? >> let me tell you something, if you want to talk about that less talk about the millions of dollars at the obama administration if companies like solyndra so people like george geyser of their bundling, would you like us to subpoena him? >> wire you interrupting members? >> i am responding to your question is the allegations. and chairman, and then telling you that right now we will recess for ten minutes. [background noises]

>> remarks earlier today from congressman henry waxman during a house hearing on the proposed xl plug -- oil pipeline. and we are live now on deductions and an office building where we of britney coverage of a hearing on management and military cemetery there has been underway since system ago. >> the subcommittee's investigation also found that officials of the cemetery at the army failed to conduct basic oversight. for example, arlington's former leaders approved project to automate and digitize burial records which resulted in millions of dollars in contracts over a decade without producing one usable product. in addition, there has been no review or audit of the cemetery for red decade prior to the inspector general's 2010 review. as a result of the investigation of this committee, i introduce

legislation to address those areas. the bill ultimately required 12 co-sponsors and pass the senate and was signed into law in december of 2010. the law requires two separate reports by the secretary of the army. the first provision requires the secretary to verify the identity, location, and burial records for grave sites in arlington, national cemetery and present plans to remedy any errors found in the review. this report was submitted on december 22nd, 2011. the second provision requires the secretary of the army to submit an annual report for the next three years on execution of the secretaries june 2010 directive, which changes the structure and authority of operations at arlington national cemetery. this first annual report was, in fact, submitted september 2011. the law also required the comptroller general to present a report to congress on the management and oversight of contracts at arlington national cemetery, including your view of

the feasibility of the advisability of transferring to or sharing jurisdiction of army national cemeteries with the department of veterans affairs. this report was released in two parts, december 15th 2011. the finding of these reports and the way forward from here are the subject of today's hearing. we will hear from the army inspector general and by gao, government accountability of this command arlington national cemetery of what the army in the cemetery had done to try to remedy the failures of the past. we'll also hear about what almonds and the army still need to do to ensure this never happens again. the reports revealing much work remains to be done. arlington must be put on a course that will ensure no tragedy like the one we saw unfold in 2010 is ever again reported. at the outset i want to commend the staff for their efforts of the last 18 months. the corrections made constitute

a change from what we saw under the cemetery's prior lead. i would also like to recognize the army inspector general, both old and new. the original 2010 reports issued under the leader of a general macquarie indicates the quality and independence that we expect from the inspector general community that and i expect that he will continue to hold arlington and other army officials accountable in his new role as army inspector general. as i tell witnesses from gao at nearly every hearing, you are the unsung heroes of the government for the work you do every day. nothing pains me more than when people take political cheap shots at government workers, particularly because i am aware of the work is done at gao, the incredible savings that you produce for taxpayers in this country every day, and the

dedication with which you go about your work. and it is not like you're doing it for big bucks. as i tell, during the september september 2010 hearing acid that i would continue my work on arlington until i was confident of problems were fixed and that we can stand tall and is sure the families of our veterans that they would never again need to wonder about the location of their loved ones' remains. i look forward to continuing to work with all of you and my colleague to make this goal a reality. i think the witnesses for being here and look for to their testimony. >> welcome. you're welcome to make any comments the like. >> i would like to. thank you very much. thank you for convening this hearing. leading the charge to expose and address this issue. want to take the witness is ahead of time. when the issue of this march

brave and mismanagement at arlington candelight initially i saw it as a black dot that needed to be made right. our nation is entrusted with certain sacred responsibilities. it is not only about honoring in taking care of those who wore the uniform, our being there for families during their time of lost. when ingested with the remains of their loved ones, it is incumbent upon this nation to carry out its responsibility with the utmost respect and dignity. unto many occasions in recent memory whether his been mismanagement at arlington cemetery of the mismanagement of remains of american troops it dover air force base, the responsibility has been abandoned and the trust with the people for whom we serve has been broken. as the chairman said tell i'm happy to have you here. by all accounts he stepped up to the plate and made some tough decisions as to the number of new reforms, and they're very much appreciate that. as a recent gao report pointed out -- we are not there yet.

when you're trusted with the separatist possibilities, there is no margin for error. so this afternoon to look forward to your testimony in the look more for discussion that will happen after that testimony once again, thank you all for being here. >> thank you. let me introduce the witnesses. our first witness is lieutenant general peter van gogh, the inspector general of the united states army appointed the the position on november 14th, 2011. he is responsible for investigating allegations of misconduct by army officials. most recently deputy commanding general of the third army, united states army central at camp era sean, kuwait on september 2009 to september september 2011. i could also probably talk to you about contacting of the there. i know that is the center of most of the contract and in contingencies.

the director of acquisition and sourcing governments management team, responsible for a portfolio manager management public policy issues related to the protection of the nation's critical technologies, including export control, the defense industrial base, navy shipbuilding, defense acquisition work force, an army modernization programs. the director of defense capabilities management at the u.s. government accountability office. he directs audit evaluation teams the review the department of defense support infrastructure, closure and realignment, installment, assistant to modernization, restoration, base of operations, including installation services, management of training ranges, infrastructure, privatisation programs the map facility energy management. catherine, and then is the executive director of the army national cemetery program, appointed to the position on june 10th 2010. as the executive director she is irresponsible for both long-term

planning and day-to-day administration of arlington national cemetery and the u.s. soldiers and airmen home national cemetery. help several other military positions, including serving as the civilian deputy to the demanding general, u.s. army material command for 2006-2009. it is the custom of the subcommittee to swear in all witnesses that appeared before us, so if you don't mind i would ask you to stand. these rate that the testimony you would give before this subcommittee will be the truth and the whole truth, and nothing but the truth so help you god? but the record reflect that the witness's answer in the affirmative. please be seated. we will be using a timing system today. we would ask that your testimony , it is says no more than five minutes. i will say somewhere around five minutes. this is very important if you need to go over two or three minutes. i don't think that we will mind.

your written testimony will obviously be printed in the record in its entirety, and we will begin with the lieutenant general. am i seeing your name right? >> you are, madam chair. >> you're probably used to having it browns 17 different ways and don't even pause. >> i will answer to just about anything, as long as i know that they're looking to me, madam chairman. thank you for the opportunity to speak to you today, and thank you for your input, support command guidance over the past 18 months. has made a significant difference in arlington. assuming the duties of the inspector general, i have met with the executive director, her team, and other state policy have been involved in correcting the deficiencies found in arlington. to fully appreciate the progress that has been made one only has to review the june 2010 ig a report which the device 61

deficiencies, among them being a deplorable organizational climate, arcade recordkeeping, and automation systems, and controlled confecting and buzzing processes which is a significant problem with% accountability. in contrast are 2011 ig report room milled no deficiency and noted significant progress plaza due to the course set by the army's director of 2010-04, the efforts of the is a director entertainment support from the army staff. in short, the mismanagement and deficiencies reported to you and the june report have been relegated to the past, an arlington has transitioned from successful crisis management to sustained excellence. allow me to share just a few specifics. the previous environment that contributed to mismanagement and substandard performance no longer exists. these a kid director has a step was a positive work environment emphasizing corporation, coordination, and collaboration. work force surveys make the

department of 2011 reflect -- inspection reflecting steadily on around community, and organizational effectiveness of the cemetery now possesses an advanced and fully functional innovation technology infrastructure supported by a service agreement that the army in his team of army technology agency. leverage the consolidated service center to more effectively monitor and respond to customer calls, thus improving customer service. in the computer application has been critical in establishing accountability baseline for each gravesite and dispirited 2011 inspection team reviewed 25 contracts covering services committee's hearing, and destruction, and found that these are now properly aligned with contractors possessing the requisite skills sets to perform required work. new acquisitions are suggest -- subjected to rigorous analysis, and contract package reviews.

while we still knows some errors in 2011, no more egregious and the number was significantly less than 2010. arlington now works closely with the office of the administrative assistant in the assistant secretary of the army for financial management to ensure improved oversight of the cemetery budget formulation and execution. transition to the general fund enterprise business systems provide full visibility and transparency of cemetery expenditures. finally, with respect to improvements the executive director recently published a campaign plan which includes major efforts to complete gravesite accountability, address long-term expansion to the cemetery, and complete documentation of policies and policies of -- policies and procedures. it assigns responsibilities, time lines, and metric to measure progress. with this encouraging news comes the reality that there is still much more work to do. the 2011 army idea inspection

report provided to c-span.org recommendations for continuous improvement. i will highlight a few key actions. they must finish updating relevant policies and procedures further, the arlington leaders must complete the documentation and validation of the internal processes, procedures, and controls. the reason or to establish the group said accountability baseline must continue to resolve the nearly 50,000 cases that are still outstanding. the effort must be exerted to establish a multi service policy that standardizes required assets for full honors funerals and enables maximum utilization of finite resources at the cemetery. the executive director must coordinate with the army staff to establish enduring external oversight process is to prevent any reoccurring up past shortcomings. the department of the army must finalize and implement enduring organizational and support relationships for the national

cemetery pro gram. finally, the army must maintain the support of an oversight that it has provided recently to its national cemeteries and apply lessons learned from arlington to all secretaries under army control. in conclusion, whatever remains a priority for the secretary and the army. significant progress observed holidays the secretaries that serves to approach to creating a management we found to be lacking in 2010. this strategy executed according to the executive director campaign plan was the support of the army and defense department and other federal agencies and congress have set the conditions for continued improvement and ultimately sustained excellence. thank you kamala didn't offer the opportunity to testify today command of the court to answer your questions and working with the committee in the future. >> they keep, lieutenant-general. ms. martin. >> madam chair, senator tester, think you for the opportunity to

appear before the subcommittee to discuss the gao work. you alluded to legislation that became the mandate for gao to review contract and management issues. those reviews found that arlington has taken significant actions to address its problems and that the path forward is par arlington to sustain progress through improved management and oversight. my colleague will discuss this yale work on management issues on contacting gao identified 56 contracts over $100,000 that supported cemetery operations, construction and facility maintenance, and new efforts to enhance i t systems for the automation of barrell operations arlington does not have its own confecting authority, but it relies on relationships with contract encompasses to award and manage contracts on its

behalf. these confecting authorities f the 56 contracts35 million in covered by our reviewar has takf steps as the ig has alluded to, since june 2010 and different levels to provide for more of effective management and oversight of contracts, including improving contract in practices, establishing the support relationships, formalizing policies and procedures, and increasing the use of dedicated contract staff to manage and improve its acquisition. however, the gao found three areas where additional improvements are needed. first, maintaining complete data on contracts. second, a defining responsibilities for contacting support, and, third, contacting staffing needs. will briefly summarize key

findings in these three areas. first row with respect to maintaining complete data, we pull together informational arlington contracts from various sources, including support organizations. however, there were limitations with each of the sources. to be able to identify, track, and ensure the effective management and oversight of its contracts arlington leaders the complete data on all contracts. second, with respect to support relationships, the army has taken a number of positive steps to better align arlington contract support with the expertise of its partners. for example, arlington has agreements with the army information technology agency, i paul soglin, and the army analytics group to help manage its i t infrastructure. while these agreements spell-out services that ipo will provide to arlington and performance metrics against which they will be measured, they do not

specifically address the contract management role and responsibility in support of arlington requirement. although officials told us that they clearly understand their response abilities, the question is, what happens in the future when they are new personnel in place. going forward, sustained attention on the part of arlington and its partners will be important to ensure that contracts of all types and risk levels are managed effectively. third, with respect to dedicated contract staffing arrangements, three contract specialist positions have been identified for arlington, but have not yet been filled. arlington is presently receiving support from the contracting office in the form of ten contracts extent positions, five of which are funded by arlington , and five by ford

bellmawr. owing to the officials have a identified the need for a more senior confecting specialist and are developing plans to fill this new position in fyi 13. in closing, the success of the army's efforts to improve contacting and management at arlington will depend on management's sustained attention and efforts to institutionalize positive steps taken today. accordingly, we made a number of recommendations in our december 2011 report to improve contract management and oversight in the three areas where we found shortcomings. for the most part the dod agreed that there is a need to take action and have provided time frames for doing so. we will continue to monitor their progress. madame chair and members of the subcommittee, this concludes my short statement and i will be happy to answer questions. >> they do, ms. martin.

>> thank you, madam chairman. madam chairman, and members of the subcommittee, thank you for the opportunity to be here today to present our findings in reviewing oversight and management of arlington national cemetery. as you know, we issue our report on december 15th, and my testimony today will be based on our report. will make two points today. first, will discuss the policies and procedures at the current leaders have put into place to manage the cemetery, and i will identify some of our recommendations to assist in that endeavor. second, i will discuss some factors affecting the feasibility and the advisability of transferring arlington from the army to the department of veterans affairs. here is the bottom line. i think it is fair to say that the current leader at arlington has taken many positive steps to address the deficiencies at the cemetery and make improvements. the army has made progress in a range of areas, including

improving chain of custody procedures to ensure proper accountability over remains, better providing information assurance, and improving procedures to address inquiries from the families and the public however, we believe further steps are needed to insure that changes are institutionalized and will prove long-lasting long after the spotlight has faded. therefore, we have made recommendations in six areas. first, they should complete the -- enterprise architecture to ensure the investments are aligned with the future operational requirements. second, and updated work force to insure the work force is properly sized and trained. third, an internal assessment program to gauge how the cemetery is doing and to make any improvements that may be warranted. fourth, improving coordination with the cemeteries operational partners, the military district of washington, the military service on our guard, and the

joint base mire henderson hall to ensure, for example, scheduling conflicts are aborted and the right our guards are available when needed. fifth, a strategic plan or campaign plan with the expected outcomes, performance metrics, and milestones. six, written policies explaining how to assist families when the assistance is warranted. the cemetery has generally concurred with the recommendations and begun to implement them. we are encouraged by this. now my final point. the question of feasibility and advisability are transferring arlington from the army to the viejo is certainly feasible. as you know, the congress transferred more than 80 army-menaced cemeteries to the viejo in the 1970's. however, several factors could affect the advisability of this. such a change could have potential cost benefits, leading to an important transition challenges and affect the characteristics that make arlington unique among our

national cemeteries. thus, it may be premature it to chains jurisdiction, as the army has significantly improved its management of arlington. here are some of the specific challenges that could arise in the jurisdiction of change. first, define the goals of the transfer, why is the transfer to be made? second, the army and the viejo have their own staff processes and systems to determine burial eligibility and scheduling and managing burials. arlington has more restrictive eligibility for in-ground burial the nba, for example. third, arlington's appropriations structure is different than the a's, and congress might need to address that in the event there is to be changed. fourth, the army provides military funeral honors, but not the viejo. fifth, arlington house many special ceremonies throughout the year, including some involving the president and visiting has of state. finally, clinton is one of the

most visited tourist destinations in washington, hosting over 4 million visitors per year. we think there are some opportunities for the army and the eight to cooperate more with the mutual benefit of both organizations, but most importantly, for the benefit of our service members. here are some examples. staff dedicated to establishing eligibility for burial and their cemeteries and the federal scheduling center that could assist arlington. conversely, va officials are examining whether geographic of formation systems or global positioning system technology should be used in their cemeteries, but the army already provides such services and could assist with the -- va if deemed appropriate. since no formal mechanism yet exists to identify collaboration opportunities, rebought recommended to departments established one, and they agreed. in conclusion we believe the army has worked to the crisis

and taken steps to put arlington national cemetery on a sustainable path to insured effective cemetery operations. our recommendations are offered in the spirit of helping this process along so that we never have to come before you again to have this conversation. that concludes my prepared remarks, and i'm happy to answer any questions that you or the other members of the subcommittee may have. >> thank you. >> madam chairman, distinguished members of the committee, thank you for the opporunity sedates to provide an update on the progress the we have made at arlington national cemetery. want to state up front that we still have work to do. to correct some other meeting challenges that we have an arlington as we have just discussed by the colleagues of the hearing with me today. what you to know that i and the united states army except those challenges. we are all dedicated to restoring the dignity and honor

that our veterans and their families so rightly deserve. significant progress has been made. our contracting practices now bring the cemetery in compliance with federal acquisition regulations. the implementation estimate of the art technology now makes the ground at arlington while the most technologically advanced cemeteries in the nation. a different perspective than 19 months ago when the cemetery lacked physical storage chip, was a paper-based operation where calls were not answered, and with the work force was not properly managed, trains, or equipped. in the accountability report recently submitted to this congress we examined to, as soldiers from the old guard photographed 259,978 gravesides, niches, and markers. in the accountability task force, couple those those with existing cemetery burial affirmation that for the first

time consolidated 147 years of cemetery records, records created from what with interest, paper-based records of determining great cards, and computerized burial records. we now have them in an accountable database. test the submission of the report the total validated greece sites without any burial discrepancies and evidence is now 310,076. we are working diligently to close the remaining 19 percent of those cases to bring our efforts to completion. the creation of a single, complete, verify data base will soon allow families and other stakeholders with internet access to search for and produce a picture of any marker in the cemetery and reveal publicly available information about that gravesite through our state of the our website. in the area of contract in we have made significant progress in contract management, a chance

for an hour confecting activities to position the army national cemetery program for long-term sustainment. the army has resource start contacting support an oversight, adding skill acquisition personnel to support my staff improperly training the workforce in the acquisition process. i do believe that arlington has made some monumental changes in the last 19 months, but we continue to move forward each and every day, capturing our progress with repeatable processes and predictable results. in order to orchestrate the many activities required to effectively run arlington, we developed the army national cemetery program campaign plan, which codifies an one strategic document the long-term vision for the operations of arlington in this soldier emmen, cemetery. it is the vehicle and i and the superintendent will use to ensure that we achieved our vision for the cemetery. ..

in conclusion, i personally want to thank this committee for its leadership, its guidance, support and encouragement for helping us restore the faith and dignity once again to arlington national cemetery. i look forward to your questions. >> thank you, ms. condon. i may start. i think people realize that i talked about in my opening statement about the old guard.

it's not like what he said the cemetery's old guard, people don't realize that these are in fact at his numbers of the army that are assigned to the cemetery. and while they are called the cemetery's old guard, they are anything but old. these are young men and women who have msi to do the work at the cemetery that we all think of. the honor guard, they caisson. i do want to point out when i began asking questions that it was in fact the young man they came to the cemetery when i went out there in november and had the opportunity to thank a number of them, they decided many of them showed up at midnight and worked through the night until five or 6:00 in the morning with cell phones and/or cameras and individually went through the cemetery and photographed over 259,000

gravesite. and while some people might think about work at something that was less than honorable, it was remarkable in talking to these young men -- proud members of the military, proud soldiers how on earth they were to have been engaged in this task. and they want to point that out because they once again confirms in my mind what i learned over and over again as a member of the services committee, this country is incredibly blessed by the men and women to step across the line and say take me. so let's talk about the number of graves and discrepancies. we've heard there were 330,000 graves, 100,000 graves at darlington. and now i know there are not 330,000 graves at arlington. where had that number come from? why was that number being used

if it is off by a company you know, almost 100,000 graves? >> man, the 300,000 number was a number of the people who are actually interred at arlington national cemetery. that is not the actual number of gravesite. because as you know, you can have a husband or spouse in the same gravesite and sometimes even dependence along with them. i can tell you right now, that one of the efforts of the accountability task force will be to truly identify with the number of people who are actually interred in the cemetery and right now our data shows that it's over 400,000 individuals. but until we complete the results of the accountability task force, we will not be litigated the accurate number of people who are interred at the cemetery. >> so we now know we have at least 70,000 more people. at arlington than had been previously estimated.

>> yes, ma'am, we do. >> the additional review appeared with her today they will be over 64,000 gravesite that will need additional review appeared what does that mean? >> man, to give you a great example, part of our accountability task force is a set of cereals. we set up business rules. one of our business rules was that we had to have at least two official documents to match with a photo of the headstone of the niche. what we are finding in previous as reported in the task force report is that there was a period where all we had was literally a rocket of interment for a great card. what that means is we are looking at other sources of official data, such as the social security index and since this record so that we can truly verify the information of those interred. so that is one of the examples of what i mean.

>> so what you are saying is we have over 60,000 gravesite, where we don't have sufficient backup and documentary evidence for you while to be certain that you have gotten it right. >> yes, ma'am. as an example in section 27, which is the freedmen billet section, all we have is they had done this as citizens and that is how the information we have dared. but that is one the examples. >> okay. i want to think it would take to get through this additional 64,000 gravesite, where you cannot at this point speak with certainty about who is located there. >> man, as i stated in the report, because we currently have a team of 40 individuals who are not temporary employees working on that, we should probably come to closure by this summer. >> okay. let me go to contrasting. one of the things that was interesting to me in the gao report is you all use contracting services to various

places not to miss him someone who spends a lot of time around the subject matter makes little alarm bells go off in my head. it is hard enough to do contract oversight if you have one contract can source in terms of your work. the with you all using several different contract and personnel from several different agencies, i think it is really problematic that you are ever going to get the kind of control that you need. to you think you should bring it in-house? are at a minimum, try to locate all the contracts either with the army corps of engineers or with the northern virginia contracting authority or one of these various places that you are not actually executing contracts with name? >> that was was one of the issues i addressed immediately when taking over as executive chair. one of the first things i did was sign an agreement was to contracting agencies, with the army contracting command for all

of our service contracts and with the corps of engineers for all of our construction contracts to most of our contracts really our service contracts and that is why our mission and installation contract and command is the one who has a contracting support element who was supporting me at arlington national cemetery. so really, most of our contracts are channeled through because their service contracts such as our landscaping, et cetera. i am very confident that we have a handle on our contracts they really going to those two agencies. the core for major construction projects in the installation contracting command for services. >> going forward, those are the only two you are going to use in their early delineated from a management perspective that you feel confident you can keep track? >> i feel confident that he'll be other contract team is before no longer has an individual information to knowledge he contracts. i am now part of the headquarters department of the

army support for i.t., so i only have to put forward my requirement. i am off to have separate contracts to support that. i am comfortable with where we are going now. >> ms. martin, do you feel okay about the way they organize the contract at this point in time? >> yes, we would not take exception with the fact that they use outside sources for contract name. as ms. comden alluded to, they have two means of doing that. one is to go to a contracting authority to identify their requirements, their oversight, et cetera appeared in the second means us to partner with army wife's efforts that would become a task force of speed. so we don't have concerns but that. what it means is that, just as you alluded to, madam chairman, you have to do more with respect to management and oversight to give visibility in the contract, to make sure that the

requirements are stated in a way that you get deliverables and that you provide the adequate oversight. so it is not so much the vehicle. it is the management, oversight and visibility that is important. i think ms. comden alluded to the fact that she took actions to try to do that. >> great, okay. senator tester. >> we will start with you. as i said my opening statement, we've got -- the trust of our nation depends upon the work that is being done in arlington in rebuilding that trust is going to be a tall task. can you give me any ideas on what you're doing to help rebuild that trust? >> senator, one of the things that we have focused on is honoring the fallen and making sure that we are doing everything we can to provide information to the families of our loved ones. and i think the greatest step forward on mac is we now how the

means to communicate with those who are scheduling services by just the implementation of our call center. before, but really most of the telephone calls went unanswered. now every phone call to the cemetery is answered. so i think we have the means to show our loved ones can schedule their service. that is a great step toward restoring the confidence. >> that is good. how about outreach to families who have had concerns? >> what we did this every time there was an issue with an affected family member, we personally work with the next of kin on each and every one of those cases so that they know we have been open, we have been candid and transparent with each and every one of the family members. >> so from your perspective, you are 100% confident folks are where they should be in their final resting place? >> sera, as in the report to congress, when we do our accountability, there is still a

possibility of human error in a burial at arlington. but if we do discover that there could possibly be a discrepancy, we have set procedures where we follow each and every case, where we notified not on the congress, but also the next of kin and accommodate what the family's wishes are in case we find any. >> do you have any mechanism, i guess redundancy to be all to determine if there's a mistake? you have an ability to find a quicker? >> sera, we have the ability, you know, from this day forward we now have a six step chain of custody procedure. we've implemented new procedures. and what happened prior to june june 10, we have procedures on how we will handle in a discrepancy we find. >> that's good.

i think it's critically important that every effort is made to do it right. at the first hearing we heard about millions of dollars in contracts that were being utilized appropriately. we talk with madam chair about some of the things you have done to eliminate that. i mean, we are at times with us to be here. we have an important job at arlington and other military cemeteries. but there still are concerns about dollars with the recommendation to go to a one or something like that. we talked about the contract. i just want to touch on the contract review for just a second. the information i had is the organization with 35 contracts. i think that is gao numbers. you are saying, ms. condon, if

taken at two to contracting organizations and those to deal with all of your contracts now? >> except those contracts that are from the headquarters. >> how many contracts are with the army? >> right now is predominantly our i.t. contract. i would have to get the exact number for you. >> will point is it goes to oversight of those contracts. and our week at number one, are we giving our contracting dollars under the contract given? do you have enough oversight? i'll give you three questions if you can headband. the third one is because you have -- and i understand the i.t. staff with the army. i do know how you do that, you have three contracting agencies.

does that require more manpower than if you just had one and went with? what's the advantage of two is what i'm saying? >> is purely expertise. the core of expertise is clearly construction of me is the core for construction. >> what's the other one? >> yet there is contracting command, which is part of our services they are, services such as landscaping the ground. >> so the bottom line, are we getting bang for the buck? >> sera, yes we are. one of the things they have in place now that we didn't before this we now have trained contracting officer representatives in each and every day we are out there holding contractors accountable for doing the job correctly. so i think we truly are getting the bang for the buck. as a matter of fact, we consolidated from our service contracts when we started the cemetery there were 26 contracts.

we consolidated them down to 16 contracts. each and every one of the 16 contracts, when we recomputed it came under the government esserman and we did have cost savings by just consolidating those contracts. for example, with six contracts to add something to do with the tree. by consolidating contracts to one contract, we are able to save the government money because stewards of the taxpayer dollar. >> we appreciate that. that's exactly the point i'm getting to. i think it easier for oversight and there's more accountability. i'm sitting here and you are sitting there comest he may have a different perspective than i appreciated. when it comes to tech, your contracts with tech, you talk about the great sites now. they are all in a searchable database you can find out what is going on. i think that is good. it should've been done years ago. better late than never. the question as as the look of

businesses as they move towards technology, there is a reduction in manpower necessary. i think it was the gao. correct me if i'm wrong, ms. martin, but he recommended 200 staff -- somebody recommended 200 staff at arlington. doesn't matter. the question is asked to look at at the overall landscape and see the kind of changes you're making, is your manpower demand going to continue to go up, or do you see a potentially becoming static or potentially going down? >> sera, that was one of the things that mr. hallinan and i when we can work this we were truly building the workforce that was required to run arlington properly but we didn't have before. what we are also doing is looking not only at our manpower. we feel the numbers we have now are adequate. but as we look into the future, as we get time to assess the technology in the operating

procedures, you know, there's some things we are currently putting on contract that we could from within the house? because we do realize that the downsizing of government, et cetera. that one of our goals is to make sure that we have the right number of people to do this. >> yeah, and i agree. although i will tell you an excuse me for taking my time in a shed, madam chair, but a lot of times we use contractors to be said contractors. i mean, to be general contract reason we can be doing a good we can do that get more efficiency from the dollar quite frankly and we could get more money to the ground and more money to get work done in this contractors pockets, which i think is ultimately something that's pretty darn important in this whole thing. so i want to thank you. i want to tell you -- and madam chair knows about this as much of anybody, but the contracting that goes on in government right now, maybe with your exception

and this has changed in the last 15 months or so, but almost every contract that investigated into come in various, fraud and abuse. and i would just say, thank you as i said my remarks for the work you've done. thank you for the work you're going to do. i very much appreciated. that is not to take -- it does let you guys off the hook and i'm sorry. i should've asked you guys are questions cannot be thank you baronet, madam chair. >> senator pryor. >> thank you for having this hearing. it's very important. general, if i may stay with you and the lessons learned area i know you spent a lot of time on arlington national cemetery and i appreciate that. if concerns that there may be other arlington cemetery problems out there and assist them with other national

cemeteries? >> infers the other national cemetery is concerned, we are pretty much focused on not. they said to have a plan to get after that as she works through the arlington issue. we do have 28 other cemeteries that oppose cemeteries out there. and quite frankly we are starting to take a look at that as well based on public law in the nba a 2012 they've asked us to take a look at the service academies cemetery are getting ready to launch a nap now. will be participating with the department of defense to take a look at a statistical sample. the clearly from our perspective, we're looking forward to taking a look at what else might be out there. we have no indications at this point that there is anything, but we want to make sure we don't have another arlington that is out there. >> you have no indications at this point? >> not this time, sir. >> i know that the gao made several recommendations and one was enhance collaboration

between the army and veterans affairs on ways to improve operations. as i understand it, there hasn't been any sort of formalized working group. is that fair quiet >> i think where we are at right now, senators, the department is looking to collaborate with the veterans affairs. ms. condon is the executive director in a proponent of the best position to take a look at what we need to do with arlington national cemetery. there are things that have gone on however. the scheduling system, for example, with the burial operations support system that the va runs. there is work ongoing right now to take a look at how we are going to align some of the automation digits if you will to make that compatible so the information can be shared back and forth. in terms of the internal assessment program that we are so concerned with for arlington

and but ms. condon has as a component for campaign plan, the operational assessment regimen that the va you says, that being incorporated. mr. hallinan with his expertise in being a superintendent is taking advantage of using that document as a base document for that which he might use them as internal regimen. there are a number of different aspects right now that are going on at a lower level. i really commend the intent was to start at the ground up and find out where we need to have some collaboration and coordination and it will be pulled up over the next six months. we look forward to seeing something when we go back down to arlington in june, july the summer. we have another real look we have to do accordance with public law and we're looking forward to seeing some of that. >> ms. condon, given a comment on that? >> sera, we are working with veterans affairs. not only from an integration of

ice hatchling system with their burial operations system, but we are also having an agreement for a secretary at the army and secretary of the va, where we are leveraging their training. we have sent several of our employees to the va training program that we are looking at having a way where we cannot and turns turns back and forth to train the cemeteries. one of the things that we are also looking at us we are probably a little bit further ahead right now from a geospatial standpoint and we would like to share that with the va because of the steps that we very taken to geospatial a miniature cemetery. >> one of the other recommendations that the gao made within how you should interact with families. and now, sounds like there's a set of recommendations made. what is the current process for notifying the family if you guys have identified an error?

what's the proper -- what do you do now? >> to identify an error come the first thing we do is the research to make sure that, you know, we have all of the facts from a cemetery did. and then, the next step is to notify the next of kin and to explain the discrepancy that we may have found and to discuss with the family how come you know, our plans direct to find whatever the discrepancy that is an accommodating the family's wishes on if they look like a chaplain, if they would like to attend, if we have to do all of that. so there is a set procedure to be used for each and every case. but the bottom line is we immediately notify the next of kin when we find a discrepancy that could impact their loved ones. >> is that no written policy? >> sera, it is no written

policy. >> also for my background information, and looking at the problems that arlington, did most of these problems happened during a set period of time? or did they go back to the beginning of arlington and it shows the folks at the age of the cemetery? >> the age of the entire cemetery. >> and so, what happens if a family member comes to you and says think there's a problem. what is your process and? >> of a family member comes a problem, the first is to research to see if there truly could've been a problem with that family member. >> okay. and if a family member just reaches out of context and says i want to make sure that my loved one is where he is supposed to be in everything has copacetic, same thing? you guys have a process they are? >> yeah, where the process there, sir. list of our burial at arlington

are grazed their burials in the family. so we have a process for a family that has a concerned and as part of our accountability task force that we verify not only the headstone in the records that match for that gravesite. >> there's been some discussion about electronic database. are you saying that you are putting every person buried in arlington and electronic database? >> every person arlington's record will be in the database. >> it has not been done, that you're working on that? >> is part of the accountability test for us in part or a geospatial effort as well. we are months away from actually having the application where you will not only be able to find your loved one, you know, records, but we will have an application by one of your smartphone to elegies that literally take you to the actual gravesite, which is why we started our accountability task force by using phone technology

with the old cards taking photos using a smartphone because that was our long-range plan for a public facing application for the general public. >> by virtue of having a database and the intention this issue has received over the last year or two, do you think these problems are now fixed going forward? >> sera come within accountability we are doing for the task force is how we are going to account for each and every burial that we have at arlington from this day forward. as a matter of fact, procedures are in place. our workforce is not taking photos of that sounds and matching them up with their automated records. >> thank you. >> thank you geared at lafayette and a visit to burlington n-november i had the opportunity to look at procedures now in place and there is a lot of redundancy. it will be very hard for them to lose track of a burials site and

what remains are located there based on the process, which is a big improvement. >> i was worried about the obligated funds issue. and now, i don't think any to tell anybody that is testifying today, that we are trying very hard. i think there is a newfound sense of urgency to watch every time that is spent and to be accountable for every dollar that's obligated. imagine my concern that we have $15 million in obligations that were out there that it's never been spent. in fact, the audit agency found due to poor financial oversight by the previous administration, $27 million in obligations between 2004 and 2010 were made and never dispersed. now what worries me about this

is that nobody noticed, that clearly the systems were not in place, that someone wouldn't have some kind of notification that you had significant obligated funds that have never been disbursed. i know we recovered part of them. but about the other 12 million an disbursed funds for any of you? and what kind of reassurance is? maybe you need to talk to army out of here, of inspector general. but if i were the inspector general, this would get my attention because i would wonder where else are there on obligated funds that are hanging out that we could pull that for the taxpayers to be put forward a more important news or better yet to put back in the treasury. >> i couldn't agree with you more. among other things we will be doing this summer as you know, the army audit the king county

take a look and very thoroughly went through intense existing contracts they have in place. in spite of the previous regime assess and that they were short of funds, they in fact had funds that they couldn't account for. i have to give credit to the current executive director because when she came on for the first thing she wanted to do is give visibility of it and she went after the general fund enterprise systems that enable them to begin to account the audit agency with the assistant secretary for acquisition logistics and technology update program management reviews and they were able to uncover something teen million that essentially has been reconciled and put to good use because ms. said to did not want to submit a budget requests until she knew what the money was that good stewardship from our data. however, what we want to do is make sure to come down for a second look for this year, a

third the next year. we want to make sure we've got that for the that for the army audit agency will be coming down as part of the overarching ig inspection and we look so we've got approved rede oversight. your point is well-made as we look to other activities ongoing in the army. we will most certainly picked up that as there are some things as they look at oversight mechanisms right now systemically across the army, we've got to make sure we are spending our money propria lee, wisely, and the right places and will take that one back, not an chairman that we will work through that with our subsequent actions that we are doing throughout the army. >> if this was a transparent, if this wasn't obvious and clearly it wasn't come i think it would be very hopeful for someone at the most senior level at the pentagon to take a look at this issue of obligated, but not

dispersed. what kind of system design plays in various parts of our military, to make sure we don't have this going on? i have to believe their systems other places because for one thing i've heard too many whistleblowers or is about getting rid of staff at the end of the budget year because if you don't bend at all, they will think you don't need the next year and for her stories about being done and so forth, so that they can ask for the folder with the next year without having to admit maybe they hadn't used it all the previous year. that goes on in every part of government, not just the military. but this worries me. this is a troubling sign beyond the problems that were represented. i will follow up with other people within dod to talk about that. but it is a problem. in terms that the va, first following click here to eurocrats training.

i think that's a good idea, especially since the training for a cemetery the va does is it misery. i think it's terrific you are utilizing the greek skill set and core competencies. i visited one of the cemeteries in missouri because i wanted to compare and contrast what i mean at the end of the height of this mass compared to what is ongoing at a cemetery. i went to the cemetery in springfield and i was very impressed as what they had done there in regard to track and maintaining. one of the things i thought was terrific that the cemetery -- the office was closed, there is actually a kiosk outside the building, where a visitor could pull up with their name exactly where they needed to go with the cemetery to visit their loved ones, with a having to involve

the personnel and not question or answer. very impressive. i'm assuming that the geospatial technology are embracing, you're envisioning not only can people do this on the mark sounds, the derby kiosks at arlington are people who visit outside of the business areas of the administration can get that information. >> man, as a matter of fact, just this past week, we are in alpha testing for a kiosk that we are going to put throughout the entire cemetery and in our visitor center to do exactly that, where we will pick copies and not because of the acreage we have at arlington, literally will take you to that grave site. so we did take that from what dave is doing and we are going to have kiosk sometime late spring. >> have a gps. are you going to be able to -- let's say i arrived at arlington with my smartphone, as they're going to be an application i can

download, but i could go enter the name and it will actually take me like a gps to the gravesite? >> man, that is exactly what we are doing with our smartphone application. we're months away from doing them. >> i was worried when i saw the article in the "washington post" yesterday that they had some problems for va system, you know, isolated obviously, but i am pleased to release that they are taking a look because obviously the scope and breadth of the va system is towards arlington. i mean come people don't realize that all the cemeteries in the country and every state has some invited v-8 that the computer to talk about today at arlington and the other cemetery during events. let me do this. i want to try to leave open the door for the next hearing that we have on this because i am not going to stop until whoever it

is tryst with a right to cemeteries we now have a handle on the single gravesite. we are not very accurate he made a lot of progress. i would like each witness to state what you think the single biggest challenge facing arlington as at the present time. what remains do you think is the biggest challenge that has to be tackled and accomplished as we look towards the next 12 months of progress towards full accountability and transparency for the sacred site. let's start with general vangjel. >> thank you, madam chair. the biggest problem that exists right now is to complete the group said accountability. if we are going to establish trust and maintain trust with the american people, folks want to know that the problem is solved and is going away. i think that's the biggest thing that would face us. in order to get there, there are some sop, documents the need to be done. the documentation so we can transfer as you mention a bit earlier whoever is going to be

at arlington national cemetery. we want to make sure the right procedures and documents are in place to facilitate any transition to one that would follow. those to be the two biggest and i think the other one if i could just add one more, with bt over a long-term expansion of the cemetery to be about to accommodate the burials. i think that would be one other that we need to really make sure we've got to plans that have been executed. i know ms. condon in our campaign plan has gone after that and both are in my mind that the three. thank you, madam chair. >> yes, i will certainly fall back to the area i am most familiar with, which is contract management and oversight. you mentioned the fact that the fund that has not been recovered. that is especially important to have after the contract dated because that allows you to be able to track and identify with the sun fire. in our report, arlington has no year money.

so with money that does not have a fiscal year kind of an ending, it is even more important. >> why is that quiet why is it that arlington doesn't have a cyst year like every other part of government? >> well, at least some of the funds for the cemetery are no year funds. >> i know, but why? i don't we change that quiet the mac in terms of why i don't think arlington or the army would necessarily come forward to skp changed. i'm not sure. there's some history there in terms of the fact that it is no year money. >> that's exactly what led to this problem. setting a different set of rules for arlington contributed to the lack of accountability for many years. if it were for brave whistleblowers, we would still wouldn't be where we need to be. people are worked it out into new things badly and nothing was

happening. part of that is this no year and 98 he. is there a recommendation that should be made, that we should man the notion that arlington should not have fiscal year appropriation like anybody else with? >> senator, we did not look at that as part of our audit. but gao is on record as saying when you have no year funds, obviously there's more accountability involved in not. so from the first active for me or from gao and contracting going forward, i would say it is the insight and the oversight in terms of contracting that is important. there are still some things that need to be done. senator tester talked about the importance of looking to see, can we consolidate ms. condon and her staff is certainly done that. should mention having several contracts for landscaping and now they have fewer contracts.

leveraging the expertise of iata, all of those are very important steps. now it is a matter of getting that insight and continuing with the oversight of the contracts from our dig is very going forward. >> madam chairman, u.s. but we thought were sorted the key thing that the cemetery is to focus on going forward. i agree with what my colleagues has stated today. i might also suggest one of the key things where i said is going to be insuring that the changes have been made today are sustainable and will outlive the current leadership team. to their credit, the review we did just that begun the process of pivoting, sql, from going through the crisis, working through the crisis in beginning to put in place the kinds of policies, procedures and systems

that is implemented fully and the campaign plan is a great example, if fully implemented, should outlive the current leadership team so we don't ever have a situation again worried takes herculean efforts from very dedicated senior people to make this work. the whole idea here is eventually they will move on to some other thing, whatever that is, some of the stage their life. whoever the next generation of leaders are into -- coming into arlington shouldn't have to reinvent. >> turnkey. >> a turnkey operation. absolutely. it seems that's where recommendations went and i think that is a key issue for them right now. >> decide to. >> if i could address about your money. >> how did that happen? when did it have been quick >> arlington was a simple worksite dvd. and hence it was a no year. one of the first things that i

did with the hope of far financial management and comp troller and now that arlington is out of the general fund underpriced dismiss this time, we are now going to be fiscally trained aaron. the financial management community can now see how this went each and every dollar. the benefit of having no year money was one of the benefits of being able to be too is unlikely dated obligations from prior years and be able to apply them to the projects we have ongoing right now because it does on liquidated obligations, we were able to start and finance and we were able to put in all of those i.t. issues and put in the technology and by the right equipment to get arlington where west today. so having no year money from that it has been a benefit for myself and mr. hallinan to put in the changes we need. now that we are fiscally

transparent, it doesn't matter if we are one year money or no year money. every dollar is now an accounting system that is being monitored like every other process in the army. >> i am confused. i think it was like to know your money. we would be dominating field because noah hill a hurry to spend. there's arguments that can be made. on the other hand, we have an appropriations process that is an annual process and a justification on an annual basis. that also has a great deal of merit in terms of fiscal accountability. i understand you can say money that wasn't used. they have to come back and justified to congress that they have additional needs but there should be appropriations for them. i have a hard time believing

arlington would have difficulty getting appropriations because i think this body has great respect for what that represents your country and we want to funded appropriately. i'm just trying to figure out if a plea for transparency, good here but maybe the year-end is a discipline that everyone should have. i'm not asking you to say yes or no. i am just taking it something we need to take a look at. >> understood. we do report the carryover similar to the working capital funds that you carry over from year to year. so that would be a period that's what is the most outstanding challenge that from my perspective are facing in 19 right now. as you know, ma'am and as he incredible changes to the business processes that we put in place at arlington. and what i need right now is the

patience for us to allow to look at those processes to make sure we have the right metrics, that we have the system thread so that we can truly sustain the changes that we've made at arlington up until this point. we just need to test all of the i.t. support in all of the changes that we've made to the operational procedures. so what i need now is my interest next year that's at the superintendent and i are doing is to make sure those changes we have put in place can be sustained for generations, not just for the immediate future. >> i want to thank all of you for the work on this. quite an undertaking and those skeptical about the ability on a timetable, i think this is a great trial for people deciding that this work is important than it deserves lots of ours a lot

of effort from a lot of people and i think that the army -- to my house that is to top leadership in the army. i understood that the army board set than anyone else about the problem at arlington. the taste test on the mound, the incompetence that occurred there. i don't think anybody felt more acutely than the army. the army responded in a way that reflects the dedication they have and i am impressed that the amount of progress that has been made a substantial and significant. frankly at lightning speed for government. within 18 months we have a completely different protocol at arlington as it relates to

accountability and i think it is good. we still have work to do and i said from the beginning of the oversight of this committee would not tend until people stepped in front of this guy as dense as i think the challenges have been a and i think all the processes and procedures are in place and i see no problems that need to be addressed by additional oversight. no one said that today, so we will have another hearing. i'm sure it will be a year from now. at that point in time, general, you will have more information to report because you are planning on going back out to take another look at arlington. i want to compliment you condon because even when things were discovered that were not good, her office check in with this committee and let us know that another problem had been discovered. i think it might've been a tendency to save him never know, let's get it fixed.

but as yet there has been transparency anon is very good. so congratulations for that you'd most particularly, congratulations to the men and women who have worked hard at arlington, many who worked many years and care deeply about the reputation and the method in which we take care of the problems there. thank you to gao. we will have another hearing is probably about a year. in the meantime, problem service will depend on you to continue to let us know and we will monitor the situation. thank you froth at the progress that has been made. this hearing has been adjourned. [inaudible conversations]

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>> while the fab to senate subcommittee held a hearing, then it is not in session, but they return tomorrow to begin debate on resolution of disapproval on president obama's latest request to increase the debt limit by $1.2 trillion. that resolution was passed by the house last week. and in the senate, they will hold a vote on whether to proceed to the resolution. a simple majority is needed to advance the underlying bill. the senate returns late thursday at 9:30 a.m. eastern on c-span 2. and tonight with governor scott walker delivers his second state

of the state address, but there is currently a recall effort to remove him from office, the republican governor is expected to focus a speech on property taxes on friday day programs. according to the bureau of labor statistics, wisconsin is the only state to have lost jobs for the past six months. you can see governor walker's speech later tonight at eight eastern on c-span 3. >> consumer financial protection bureau, richard cordray told congress yesterday his agency is prepared to sue companies that offer unfair or deceptive mortgages and credit card. his testimony came before a house oversight and government reform subcommittee. mr. cordray was president obama's recess appointment in early january. this is two and a half hours. >> the committee will come to order.

the subcommittee on t.a.r.p. financial services and bailouts of public and private programs is meeting here today and the hearing is entitled, how will the cfp b. function under richard cordray. the policy of this committee as we begin with the mission statement of oversight reform committee. we exist to secure two fundamental principles. first americans have a right to note that money washington takes from a baseball stands and americans deserve an efficient, effective government that works for them. our duty is to protect these rights. our song responsibilities to hold government accountable as taxpayers because taxpayers have a right to know what they get from their government. we worked tirelessly in partnership with citizen watchdogs to deliver the facts to the american people and bring genuine reform to the federal bureaucracy. so what not, i think mr. cordray

for being here today and making time in a certainly busy schedule. i recognize myself now for five minutes for an opening statement. this hearing is to focus on the functions and operations of the consumer financial protection euro under mr. cordray. the american public has committed consumer protection regulations that discourage and from financial fraud and ensure consumers are entitled to clear, for sanctimonious disclosures about financial products. but that is simply not enough for a robust marketplace. since the onset of financial crisis, owners of congress ever businesses of all sizes that market are in need of certainty. in this regard, the cfpb has failed the first test. the needed certainty that we in the financial need, consumers

need the regulated entities need in order to extend credit israel. since dodd-frank was enacted 18 months ago, the role, jenna and authority of the cfpb has increased uncertainty. this restricts access to credit tiered in may of last year, the subcommittee hosted as the advisor for the see of pv, elizabeth warren and an effort to perform its oversight response abilities on the american public to clearly understand the beers operations, accountability is u.s. tax tears and beliefs about its authority and limit. at the time, ms. warren answers to congressional questions were fuzzy at best, leaving members of market practice and i'm shared by the bureau's areas of focus and his duplicate of role when establishing rules to existing federal regulators. encouraging signs as the news

today that there is an agreement between the cfpb and the ftc in those responsibilities. that is a good time. as a result, countless experts continue to raise serious questions about the bureau structure and broad discretionary powers on our economy and credit markets. welcome 16 opinions about federal regulators are not new, the fact of the matter is operational authority for the cfpb remain a mystery to congress and american public. for the last year and half, and arms to transfer the bureau skillfully dodge congressional inquiries about the regulators operations empowers. in the subcommittee, for example, ms. wong could not answer a simple question about the definition of abuse from congressman gatti, this question came about. i hope mr. cordray would be willing to engage in that discussion today and get some

clarity. with such immense powers over financial products left her interpretation of a single annie let it, unaccountable bureaucrat with over half a billion dollars budget, furthermore being done with a recess appointment. republican senate body and in the senate have called for meaningful exchanges to the structure of the cfpb. unfortunately the president decided against compromise. if having a regulator with unprecedented ill-defined power was not enough, the administration decided to double down they bring into question the validity of its direct here. that is unfortunate. the fact that white house lawyers must continue to justify the president's decision to waive roughly 200 years of precedent, jeopardize the sanctity of the beers operations and is unfair, in my opinion, to mr. cordray, but bureau, it's powerful responsibilities and duties, and most importantly the

american public. the irony for this to occur to the cfpb self-proclaimed as the most constrained in most accountable agency in government is channeling. nonetheless now that mr. cordray despite an appointment that is constitutionally questionable has stated his intention to send full powers of ahead of the cfpb. the subcommittee believes it time he deliver definitive responses about how he will implement and enforce the unparalleled powers of his new office. as daily headlines proclaimed mr. cordray's latest authorities and targets. it is vital that subcommittee stand committed to its mission of producing an efficient government that works for the people in livelihood. simple questions about the cfpb's annual budget of roughly half a billion dollars of taxpayer funds, dictated by a finger individual to its vast authority with united to its economy remain the third and

more persistent congressional oversight. i certainly appreciate the willingness for mr. cordray to submit to this oversight. there are many questions that do remain. i am interested in hearing or mr. cordray about his thought on what he believes the cfp b.c. regulatory authority is and how it will be promoting private-sector job creation and a robust credit market and ensuring that congress will have accurate and full oversight over this process. we disclose regulatory agenda for the year. we focus on products with an evenhanded enforcement regardless of who is suffering said products. when you get input from small businesses on your regulations that you're issuing? leader panel small businesses and hear feedback from them in your major regulatory pieces? and will you actively solicit the regulated communities? these are questions i have and i

look forward to the gentleman answering. and i think mr. cordray for making time in his busy schedule early in his service in this regard. and with that, i'll recognize mr. quickly, the ranking member. >> thank you, mr. chairman. and thank you for holding today's hearing. i'd like to begin by reading a mission statement of the cfpb. quote, to make markets for financial products work for america to whether they are applying for a mortgage, credit cards or using any number of other consumer financial products. let's remember why we are here. there can be no amnesia about the fact that these market were not working for americans before the financial crisis. we can patchwork regulation to allow dangerous consumer financial products and toxic financial instruments to infiltrate the market. unscrupulous members are able to take advantage of consumers by

fraudulent and deceptive financial projects. this reckless planning poison the financial system and directly contributed to the mortgage meltdown. we explicitly created the cfpb to protect americans from these fraudulent and abusive products. on july 21, 2011, cfpb to go or consumer protection authorities from the federal reserve, fdic, ftc, lcc, ots and hud. but by law, the supervisory authority over non-depository providers mortgage loans, mortgage brokerage services, foreclosure relief services and abusive lending practices could not take affect until a direct or was in place. that is why on december 8 i was so disappointed to see a coach or a senders block mr. cordray's nomination to be direct here. mr. cordray, a former ohio attorney general is eminently

qualified for this position. senator scott brown has called him the right person to lead the agent and will protect consumers from fraud and scams. mr. cordray, when please welcome your today's first direct correct cfpb and through president through reform committee we through. you are through cfpb tickler to work with him and his staff to make sure that americans in the fifth district of illinois as well as around the country are protected from financial fraud and abuse. ..

counteracted by extraordinary and unprecedented checks and balances. for example, the fragile stability oversight council can reject any regulation that would put the safety and soundness of the u.s. banking system or stability of the u.s. led to a system at risk. finally it cfpb stands alone among banking regulators in that its budget as a step story cap, but the simple fact is that we need the cfpb of whether you're an investor planning for retirement are veteran pam has

-- coming home after serving our country the agency will protect you. i hope my colleagues will join me in welcoming mr. cordray, and dallas-fort during his testimony. we to understand that to a certain extent europe manned. russia and the outnumbered financially. my concern is to you have the ability to meet the challenge, given the resources you have. i hope my colleagues will join me in welcoming mr. cordray -- mr. cordray. i would like test unanimous consent that other members of the committee be allowed to participate in the hearing. >> reserving the right to object the intention is that with this being such an important hearing that i want to let our members have as many questions as they have time task and that

mr. cordray has sent desk. it would be my intention to object to other members that are not on the subcommittee, aside from the make -- ranking member and the full committee chairman. i would hope that members will respect that. >> mr. chairman. >> yes. >> also reserving a point, the ranking member indirectly members of the subcommittee mexico of voting members -- >> actually voting members. our committee rules are that you must be present at the time that by name you are asked for. that has been the policy. i would not object, but i think that it would be appropriate to ask unanimous consent if and only if an individual or arrived and could then be subject to that request that they still go after all other members. >> thank you so much, mr. chairman. i would put that down as a

matter of committee rules. they do for a lighting that. >> said they guests only to yell back. >> at think the ranking member, and with that i will now recognize mr. cordray. i no you're familiar with their process. you have five minutes to summarize your opening statement. green beans go, yellow means -- welcome like your a former attorney general. you know that means three up. end red means stop. they do so much demand we look forward to your testimony. >> thank you, mr. chairman. i make a point of order that the witness has not been sworn. >> i think the full committee chairman. again, not really of of my script, i am so sorry. it's a seminal stand. if you will raise your right hand. do you solemnly swear or affirm the testimony you will give a

bit too tall to, nothing but the truth. >> i do. >> you may be seated. the witness answered in the affirmative. now i will take the time to introduce mr. cordray here who represents the cfpb and can testify on behalf of the cfpb after his january 4th appointment. they accuse so much, mr. cordray. five minutes. >> thank you, again, for inviting me. thank you, chairman, ranking member, and members of the subcommittee for taking time to hear about the consumer financial protection bureau. before i became director a promise members of congress in both chambers and of both sides of the aisle that i would be accountable to you for how the consumer bureau carries out the laws have enacted. i said that i would always welcome the of thoughts about our work and i stand by that commitment today. i'm pleased to be here with you

to tell us about our work and to answer questions. the people who work at the consumer bureau said be to discuss our work with the congress. this is a tough time with testify before the house or the senate. my colleagues and i look forward to working closely with you, the businesses to serve their customers and the consumer punish the markets and with the hundreds of millions of american consumers themselves. i am honored to serve as the first director of the new consumer bureau. i am energized and inspired by the many talented people who work with me there, endangered by the challenges and responsibilities of our mission to protect american consumers. our mission is of critical importance to making life better for americans. the consumer finance is a big support -- be part of all of our lives. mortgages allow people to buy a home and spread the payments over many years. student loans give your people with talent and ambition the ability to get an education. credit cards give us immediate

and convenient access to money will be needed. these products enable people to achieve their dreams. as we have all seen in recent years they can also create dangers and pitfalls if there are misused or not properly understood. during my years in state and local government and became deeply engaged in consumer finance issues. i saw good people struggling with that they could not afford. sometimes those people made bad decisions that came to regret. sometimes unexpected events, like a love when getting sick for a family member losing a job overwhelmed even the most careful planning. still other times i saw unscrupulous businesses who of secured loan terms or engage in outright fraud causing substantial harm to unsuspecting consumers, ruining their lives, and devastating our communities. i am certain that each one of you here is these same stories every day from your friends, neighbors, and constituents in your district. people did not want or expect

any special favors. they just ask for a fair shake. one a consumer financial system that actually works for consumers and a chance to get back on track toward the american dream. one of our primary objective at the consumer bureau is to make sure the cost of these potential products are made clear. people can make their own decisions and nobody can or should try to do that for them. it is the american way for responsible businesses to be straight board and up from other customers. it's differ on its businesses in the overall economy. a particular "caught my eye recently. freeman engaged in free enterprise build better nation's with more and better goods and services, higher wages, and higher standards of living for more people. free enterprise is not a hunting license. that was governor ronald reagan

in 1970. i agree with what he said and it is a view widely shared by the people who work with me at the consumer bureau. so another key objective is making sure that both banks and non-bank competitors receive an even-handed oversight necessary to promote a fair and open marketplace. our supervisors will be going on-site to end -- examine books ask tough questions, and work with them to fix problems that we uncovered. under the laws enacted by congress and with the director now in place we have the ability to make sure this is true across of potential products and services. the consumer bureau will also make clear that violating the law has consequences. through our field examiners, direct contact with consumers and businesses, and our highly skilled researchers we have multiple channels of the facts about what is happening in the marketplace. we plan to use all the tools available to us to ensure that everyone respects and follows the rules of the road. where we can cooperate with financial institutions to do that, we will. however, we will not hesitate to use in fourth actions to right a

wrong. we do that on our website, a consumer finance stock of where people are able to tell us the personal stories. we also make it a point to get out of washington and to hear from people across the country, we have held town hall meetings in philadelphia, minneapolis, cleveland, and their first hearing in birmingham. we're hearing from thousand americans will works and what does not and a listening closely and hope that many of you will hope to join this of these events. they que el mccourts your questions. >> thanks you and thank you for your testimony. the recognize myself for five minutes. after your january 4th recess appointment, the cfpb and its nonbanks supervisory authority

and moving forward with that. on your website you have a statement of regulatory politics . you are familiar with the sec and their process that they put forward, and they put forward an agenda that roughly outlines the years plan. would you submit to that same type of disclosure on the regulatory framework that you tried -- the you're going to attempt to put in place in the coming year? >> they do, mr. chairman. it is our intention to be as transparent as we can be, but recognizing that we are new agency in building an agenda from the ground that. first and foremost, our agenda is set by congress. we are to implement the laws and you have enacted, and our regulatory agenda in the early going is largely going to be dictated by that. it. >> there are certain rules that you have required us to do. >> number one is actually taking the existing rules from the myriad of other regulators, which you have assumed.

at what date did you become employed by the cfpb? >> b? >> yes. >> january of last year. i believe the date was january 18th. >> so you have had roughly a year as the director of enforcement. in narrow you have seen the buildup. how many folks are employed at the cfpb at this stage? >> at the end of 2011 we had 757 employees. thus the ball park. >> 7r800 folks. >> what was the budget? >> the budget that we have sought originally in the fy11-12 proceedings was 142 million. >> and he drew down from the fed, is? >> last year we drew down about 161 million. we had to make some adjustments

in light of some issues with the fed about negotiating with kind of contribution we have to make to their pension system as we joined them and when that went through. >> $300 million for the budget. so the question i have is, will you lay out a regulatory agenda for the coming year with these roughly 800 employees you have and, budget that is hundreds of millions of dollars? where he led that out for the public? says that during days will no that has to come before and members of congress will know that this part of your agenda. >> i think, mr. chairman, we have been 25 quite transparent about our regulatory agenda. it is stuffed full of requirements that congress has imposed on us and that is our first obligation. >> i appreciate that. my time is short. >> the sec and outlines the regulatory actions that they intend to take in the coming years.

other regulatory bodies do this. you are vested with enormous powers. one person invested with enormous powers over all consumer finance in this country . will you at least submit to the idea of navy laying out the agenda for the next month? >> of tell you what, i think our agenda has been prepared to everyone who as interactive with us from the chamber to consumer groups. i'm happy to have my staff work with you, and if that seems to be a best practice that is something we can do. we are not intending to hide the ball. i think our priorities are quite clear. we have stated them very clearly he won it on a piece of paper or website. >> i think it would be a best practice if you looked at what the sec is doing in laying out the regulatory is in the degree that would give clarity to the at public and allay a lot of concerns i have from small and large businesses alike and members of congress as well. >> let us take a look at that and work with you and your staff

to see what we can do. >> thank you. with current rulemaking are you working on right now? >> the bestial we are working non is actually something near to your heart, no, because he tried to legislate on it as many as five or six years ago when it would have made more of a difference before the crisis which is consolidating the mortgages of -- mortgage disclosure forms around real-estate closings that over the years the been adopted separately under different statutes by had and by the federal reserve. duplicative in many respects, a longtime congressional desire to simplify and clarify that and reduce the burdens. that is something we have been network on since may of last year and will come out with the proposed rule on that by the summer. >> further question would be with you intend to have a small

business panel for all major regulatory actions you take? >> we are required by law to impanel a small-business panel in the -- unique among the banking industries, one of the oversight mechanisms you put in place that is totally appropriate ellis the concern of five particular rule would not have a single field impact on small providers. the assumption and baseline is that we will end are going to do it. i saw some communication earlier today from one of the association's suggesting that we maybe have already committed to that, committed to congressional testimony last year there will be coming very soon. >> this year. >> on the ruling in particular. yes. >> thank you. >> thank you. the questions that were set for ms. warner are set for you as well. she had discussions with community bankers associations,

particularly my states federal an audit. the discussion was very intent about the leveling of the playing field. could you comment on your sense of how that plays out in your administration? >> yes. congressman, it is a very high priority for us. it was the first active step that we took as a bureau after i was appointed director. that was the time but which we could now begin to actually implement and non-bank supervision program, something that had been in place would have helped community banks and credit unions across this country immensely in the run-up to the financial crisis. we had what in my view was a broken regulations of the mortgage market where some people were regulated and others were not. i was state treasurer and local treasurer at the time. i heard from bankers in my area who told me that they were asked to make loans by customers that they knew would not work.

it eventually wreck the system. leveling the playing field is very important, not only to the community banks and credit unions themselves but very important for making the system work. and so it's very important to us, and we know it's a big responsibility for us. >> thank you. >> you mentioned a number of employees human-resources you have. i alluded to it in my statement. just try it to ballpark analysis of that which you are attempting to regulate. comparative of the budgeting for marketing to loans within the institutions, the number of staffing, the resources they have, the cavalry is not coming over the hill anytime soon, but do you have the resources currently to match those extraordinary levels of institutional and ability? >> i would say two things, congressman. that is a concern. we are right now a new agency, so we are building up.

restarted obviously at zero. we are at 757 at the end of last year and need to build further. we need to recognize the scope of what we're trying to deal with, the consumer credit markets, add up all aspects of that, mortgages and the other things, approximately a $20 trillion at the markets. it's a big job. i've heard a lot of talk about how powerful we are, but is an important set of markets, and we hope we are up to the task in working to be up to the task, but it is an immense challenge. >> i'm not up to demonize anyone in the industry, but we have had enough lessons in our lifetime to recognize they human nature being what it is, someone needs to regulate this industry. if you could focus in the closing parts of my time, your interest for those veterans coming home and the protections that they might need? >> as i know you know, we have been fortunate to have a

tremendous spokesperson for a service member is use of the bureau of. misses tully patraeus has been teaching us all about the special circumstances that service members and veterans face. some of the challenges that a simple debt collection issue can pose, risk to security clearance, the being moved around under orders and in this market necessarily being able to sell their home and therefore being saddled with immense financial stress for themselves and their families. the real scuffle that a lot of colleges and universities are waiting to get at the gi money that is available to returning service members go to school. and they're is a lot of concerns that she has raised will for us and for members of congress. another these are issues that are bipartisan, and there is concern across the spectrum that we would be able to address the

affectively. we feel the same, and she goes out weekend and week out to visit military bases, work with the jag court to bring home insight and perspective that we can then use to be more effective in our work and we are proud and frankly grateful to have her as a colleague and to follow her lead in these areas. >> are particularly sensitive to the concern, too, because we have veterans coming home with health issues that aren't new, but, perhaps, would be extraordinary in number and intensity. we have not had people on for five or six departments before. i would like to think our institutions would be sensitive to that. to the extent that we can help but think it is just as important. my time is over and i yield back >> with that i yield five minutes. >> thank you, mr. chairman. thank-you, for testifying today. i have a couple of questions to

talk a little bit about accountability, transparency. i assume those two things are rather important to you in the agency. >> i think there are critical to the credibility of the agency, and i think you have every right to demand that from us in the hope that you will find that we provided. >> do you recall during elizabeth warns testimony back in march of last year her statement that cfpb is the most constrained and accountable agency in government? >> i don't recall the exact words, but i recognize the tenor of the discussion. >> if i could just have the record reflect that that was part of her testimony, would you agree with that statement? >> well, i think professor warren had had more experience with the washington agencies than i have had. i had been here for a year. she, as you know, worked as congressional oversight, so she may have a more broad

perspective. i do know that there are very special oversight provisions an hour-long that apply to us that do not apply to any other banking agency. so, for example, as was mentioned earlier, our budget is subject to a cap. bnl's able to raise our budget by raising anyone's bees unlike other banking agencies. there were to ever have to go above that can we come to congress and be subject to the appropriations process. our rules can be overridden by the financial stability oversight committee, not true of any other banking agencies. i believe we are subject to more audits and financial and budget oversight than other making agencies. you know, there certainly is a way in which the statement seems quite true, whether it is true across all agencies, not sure i have the perspective to make a global comment. >> is it fair to say that your agency should be or would be an unbiased agency?

>> you know, i would hope that that is so, but at imagine that will always be in the eye of the beholder. i think one of the things that we can do in our work is to try to make sure that we hugh to that touchstone, which i agree with you is a desirable think, to make sure we are hearing broadly in a very open way from all perspectives on issues, but so particularly that we hear from both the providers and consumers that are on both sides of the transaction. i think we are making a lot of benefits to do that. but it is also useful for us to come up here regularly in hear from you as well. >> well, given that, and i appreciate hearing you say that, and i would tend to agree, we want to see all sides of an issue before there is action. my fundamental concern of record is as other members have talked about and will continue to talk about, the process by which you are appointed.

does it concern you that the process by which you are appointed has an impact on those very individuals or businesses or banks to you're going to be regulating? >> i'll understand that there is controversy, people have raised about the appointments. might intense and here is i'm in his job, an important job, big job that demands all my time and attention. all i can do is try to carry out the responsibilities that the law of the land now has put on my back and to try to do it in a way that is consistent with the values articulated which are good ones as far as transparency and accountability. so i would do that, and that will be my focus. >> you mentioned earlier in your testimony if you take direction from congress. do you also take direction from the white house? >> you do not.

and the independent federal agency. there are a number of those. it is my understanding that congress has established independent agencies to keep them closer to the congress, accountable for enforcing the law, and i expect that that is why we will be here frequently for oversight and for you to a know exactly what we're doing. >> there have been no directives that you received since your appointments from the white house to back. >> there have not. >> if there were any in the future directives would you willingly proactively share that with this committee? >> it would be within our discretion to determine our course and the way we will exercise that discretion is by looking at the statutes that we and passed. make sure we are adhering closely to carrying those out.

>> and tnc and accountability, it's better to err on the side of caution and be over transparent and under transparent, which is appointed the chairman was making about hosting things on their website. what you're regulatory agenda is. those things are extremely important for the country and for those that you will receive. so you have credibility in the agency has credibility. id as it stands today there is probably some question about that given the process by which you are appointed. thank you for your time. >> the zeroth time is expired. we will recognize the full committee ranking member for five minutes. >> before you do that if i might ask. >> remember, you're recognized. >> thank you, mr. chairman. i would like to renew my motion to allow other members of the committee to participate.

>> yes. and the chair did not state directly at the beginning. in order to ask -- and ordered to have other committee members of the full committee here today , that can happen in due course and was based on seniority and your side of the aisle at the time the folks show up. that is your party prerogative. for other members of congress who wish to fit -- sit in they have to have unanimous consent of the time. so will be recognized in due course. recognized for five minutes. >> on behalf of my constituents, many of whom have lost almost everything that they have, many of whom have lost their homes, jobs, savings, i am very pleased that you employ them. one of the most critical responsibilities is the transfer to the cfpb, the authority to oversee nonbanks, and the director, is it true that prior

to the pass of dodd-frank palin these non banks operated in the shadows and outside the scrutiny of federal regulators, is that correct? >> it is the case that there was little or no regulation of many of them or oversight of the federal level, and whether there was any state-by-state vary greatly, and some of them there was little or no lead in the level. >> in fact, one of the parties was to bring these businesses and products into the regulatory area. some nearly 20 million consumers use palin's, approximately two under million americans rely on credit reporting agencies. 14% of consumers have one or more debts in collection, and non-bank lenders originated almost 2 million new mortgages in 2010. those figures sound correct? >> they do, and as you are pointing out, there are substantial.

>> that is an extraordinary number of americans who are regularly exposed to these products who have until now receive just about zero through scrutiny. mr. cordray kamala of the debate around europe when it focuses on the bureaucratic and procedural issues, but for consumers what is the director of the cfpb mean for consumers protection, scrupulous or abusive pay lenders, for example. >> sydneys, congressman, that we can now, as we could not before, begin to have an active supervision program over four non-bank areas in particular that are specified in long. mortgage markets, which excludes mortgage rate -- originators. 2 million of those in 2010. mortgage services, who have been in natural areas in many respects, pay lenders are specified, and private student lenders. it also allows us to expand that

program to a larger participants and other fields as we will be doing shortly. at the debt is very important. this isn't only important to consumers, although it is vital for them. it is also important to responsible businesses to compete in these markets, and it is unfair for one business to be subject to regulation and oversight in a direct competitor to be subject to none. automatic cost differential in mean that those who would violate the law to good advantage can get away with it, not something we should never want to tolerate and did not submit that makes for a functioning market place. >> now, when the agency was being set up, and you may be familiar with this, she talked about how she regularly met with bankers trying to work things out. you know, the person in your position is the bogyman. you're going to go around and you're going to harm us, i guess

banks. i don't know what they think, and they forget that your main objective is to just make sure that there is a fair playing field, a fair playing field for banks, but also for our constituents, the ones who we -- to live in our neighborhoods and the ones who want and deserve to have this kind of agency moving forward and do what you're doing what's new -- now, moving around, meeting with banks, trying to work out things. for example, talking about simplifying mortgage forms and things of that nature. can he tell us what your plans are? de plenty continued that effort. >> i agree with that, and that the bankers and community bankers and credit unions in know me best, the ones from ohio

law worked with over the years when i was the treasurer at the state and local level know that i reached out to them, created a advisory councils so that they could help us do our work better, and they did. we will have a special community bank advisory council and the spiro, and we are going to have a credit union advisory council as well because we need to hear from them because i do think that their interest is often aligned with those of consumers. their business model is a customer-facing, customer service and business model. we need to hear from them. how we balance our work. >> i see my time is up, but again, welcome and a look for to working with you. >> who will now recognize mr. mean a pennsylvania for five minutes. >> think you, mr. chairman and mr. cordray for not only being here today, but your commitment to this process. as a former prosecutor i share with you a deep concern for those who are inappropriate lee

taking advantage of some of these instruments. employees to see that we are spending some time talking about the relationship with community bankers to develop the idea of how the playing field can be a level with respect to those are unregulated. and you have spent some time talking about how important it is that community banks in your own words, you know, can provide tailored products and services and in effect in other communities the best, one of the piers that i have is the tremendous authority you have. look get any kind of estimate. this fine relationship on oversight. now, the first question i have is, you are going to be regulating come to some extent, the banks that are over $10 billion in assets according to this. but at the same time we still have four agencies, federal reserve, occ, fdic, national

credit union, going to be still maintaining the oversight over the community banks. how are you going to work together to assure we don't have the trickle-down of the things that you have a you are making regulations with respect to the 10 billion end up? don't trickle down and create a whole new set of problems for community banks to make and how are you going to work in concert with all these other regulatory agencies that still have authority over you? >> congressman, i think that is an extremely insightful question because it is something that we are wrestling with in trying to figure as we go. i would suggest that it is a topic that you all should continue to focus on as we go forward over this year and the next and bring each of the banking agencies in together to talk to us about how we are coordinating, collaborating, doing to minimize any duplication. for example, the law requires us to coordinate our supervisory --

supervision exam schedules with the other regulators. we would still be in some of these same institutions. something we're trying to do on a timely basis. we should be coordinating a victim of guidance. >> you know as a former attorney general, the difficulties is the most dangerous place to be is between a television camera and one of the regulator that thinks they have the big case. you know, how are you going to deal with an agency that does not want to work with you but says, no, this is our authority? >> the people really don't want to work with you, that creates a problem, and it is not an easy one to get around we have created a very strong and detailed memorandum of understanding because we do have overlapping jurisdiction. we have two goals in mind. the first is we should not ever double-team companies.

>> i am sensing the commitment to work together. add one more question. would like to ask tea things, make a commitment to see the extent to which you can reach memorandums of understanding with some of these other agencies as well as asking to the extent that you can come i don't want to know you don't with commitments, but that you will do an impact analysis on when the regulations are made for the institution is about 10 million you will direct impact analysis on how it will affect community banks when those regulations or other determinations are made. >> i made that commitment in my testimony on my nomination in the senate banking committee, and we are starting down that road already. i have had a big call with the number of kiddy bakeries, the icba, last week might have been the week before last, kind of running the other a little bit right now. we placed to do that.

and with our religious rule, which we just put out, we have added into the proposed further tweaks, which is to figure and if they're is a threshold below which the rule should not apply because -- and that is the approach to will try to take a generally. >> thank you. one quick area that i would love to spend more time on. you have tremendous authority when you are dealing with institutions, once you determine to do an investigation, and it includes the ability to effectively ask them for all kinds of information, including what you can determine, confidential and privileged information. one of the real fears that i have is the standards that have been used before you request confidential and privileged deprivation, and then the second is when the situation, things which i imagine you are familiar with our days as prosecutors, how you will protect that against other parties that may be trying to access that. >> that is an issue that the big financial firms and not so big, have raised with us, a concern

for them. there is a bit of an omission in this debt issued, mention of other banking agencies that have a special provision that we were not included. that is an oversight that congress may want to look in and fix. >> i'm sorry, what is that? >> there are some special provisions that were added some more in the course of the last two years that specifies that when privileged information is provided to the banking agency that that does not waive any privilege against the third parties to continue to the -- very much what you just described in your question. however, instead of simply saying bake the agency's it is specified by name certain ones. we were not in existence then when we came into existence it was not noted to affix that provision in the statute. i have said that we would be supportive of that. in the meantime, we are working with financial institutions to try to allay their concerns and help them see that we recognize the problem and what to do all that we can to do our work effectively ends to be mindful

of that concern for them, which is a real concern. >> the system as time has expired. you're recognized for five minutes. >> they do. i want to thank you for calling the hearing. a lot of controversy about the financial services industry and what happened after the meltdown end to some extent i sense that the concern that is expressed by the calling of this hearing is one of excessive regulation. that is a legitimate concern. we need regulation. i happen to think the failure to add regulation cost a lot of harm, but if we have too much regulation, that tended in the way of what was being said, the facility of consumer banks. pardon me, small banks that can be collateral damage from some of the regulatory provisions of dodd-frank that were intended for the large banks in ohio, vermont, small banks were doing the job and not causing a problem. but mr. chairman, i just want to

remind members because i think this should put your mind these, mr. cordray comes from ohio, republicans and democrats who were getting hammered, save over $2 billion for consumers in ohio, and the folks who were on the saving in the that the delicate that as a republican or democratic deal. they just had a voice in the regulatory process that was an attorney-general and treasurer who would do the job for them. i also noted in the history of mr. cordray that he got to work with the better business bureau kamala of the small businesses to have access to the process felt that they have a place that they could go to to give fair consideration for their concerns that they had. also, what i heard the testimony that mr. cordray has provided is that one of his concerns will be whether the regulations are working. not as though every regulation is a good regulation. too much regulation gets in the way, and i want to give you a chance just to address that

particular concerns, which i think is a concern that many of my republican colleagues understandably and legitimately have. >> thank you, congressman. appreciate the kind words. in terms of regulations actually working, we are in a good place on this issue ended the unique place because we are a brand new agency that just came into existence, no vested interest in what has been done before, and we have now inherited just of course the regulation from other agencies. one of the first thing that we have determined we need to do and want to do is publish a notice in the federal register to say that we are interested in considering how we can streamline our inherited regulations. where can we reduce the burden without sacrificing anything in terms of consumer welfare, and the reason that this is important is you have a lot of rules that are developed from sometime, and the kind of an overtime, but with each new rule is well-intentioned, there is a

purpose, but there is not often a consideration of when you put this against the entire mass of rules is it too much? >> would it be fair to say in your view simple and clear the complex and confusing? >> every day of the week. >> all right. mr. chairman, you heard it here. also, we need to have the average city for small business, for kids listen loans, for folks are trying to hang on to the house to have someplace that they can go to to get an answer. the vermont situation, obama called her son stephen loans the part of education, to give an answer and does not got one for 30 days. they make 44,000 per year, and she is the sole provider for three sons with no place to go. another situation. this is, again, a vermont situation. a dad called our office about his son in a bad car accident.

unable to return to school full-time. after the accident he received a bill from the bank demanding payments and loans immediately after graduating and then claiming that the grace time did you get is the recovery did he have but he was in the hospital. another one, 29 years will, hundred $76,000, making her payments but could not get by. sallie mae has not been willing to discuss negotiating any kind of payment. under the consumer protection finance agency with these people be able to call your office and at least give a yes or no answer of what they could do to help to the process? >> let me say generally, we have all heard the horror stories about mortgage servicing, and there you hear from the same people the we do. there is a growing problem in

the student loan servicing rome as well. it is of concern, we are aware. we are taking consumer complaints on our website, credit card products and mortgage products and student loans will be one of those. in the meantime, we are working on trying to simplify and clarify the stallone shopping worksheet that we have worked, the part of education to try to make things easier for students and their families to understand what choices they're making. so it's an area that is of growing importance. we know not to which is grown. the burden is on people. they're stuck with these other problems that occur. >> thank you and i yield back. >> i think my colleague. to stay put the record, how will cfpb function under richard cordray.

understand the consequences of the appointment of mr. cordray. this unprecedented action, and illegal consequences as a result and the uncertainty that would create. that is the intention. with that of recognize the full committee chairman for five minutes. >> think you, mr. chairman. greetings and welcome. it is my hope that there will be any long-term controversy around your appointment and was certainly like tennessee's certainty sooner rather than later your position. let me go through a couple of things. we know -- we think we know what your agency can do. would you make it clear that for example your agency cannot order some entity to take existing contract loans and simply discounted to, that it is beyond the scope of your new agency to say, yes, we want sallie mae to cut principal and renegotiate.

that is not within your purview. >> of authority is to follow long. another example is in the statute covers made that we have no authority to set the interest rate of any product to price the product. there are states are doing that and palin's, but that is now within our authority. >> this congress has wrestled with the same difficult task. i don't envy you having set least ten people fully understand that if you take a one day alone up its $12 of the our interests and $100, as a lot of money, but it's probably if you look of the cost of processing less than the cost of processing. we often have exactly the

problem. how utterly keep counting, the fine dousing and prevented, hopefully your agency will do a good job of making sure at least a consumer is informed even if it is not within your power to change that. let me go through a couple of questions, and that no that this is difficult that you are sort of being asked about how you got appointed more often you're being asked about what you will do with her appointment, but as a fellow ohio and i'll try to make this as painless as it gets, although i represent california. you know there is a controversy, and they're is a legal challenge , i presume the have looked at some of the president's council's opinion. you're familiar as one who studies the law. >> i read the justice department opinion. >> i presume your opinion is it's a good opinion even if it is the opposite of the bush opinion, and that you are going to remain of the job as a result. >> heavily the apartment is

valid. given that i now have legal responsibilities of the law of the land to carry out my rule of director for the bureau, yes. >> but i am concerned for our country that i've been a test to a difficult question. have you been seeing kelso weighing a how you could mitigate if the administration was wrong and we find that there is, through suits and challenges to my question of action that you take in other words, do you have a plan b? v look for ways to ensure that even if you're plummet ceased to be valid the work you are overseeing would somehow have the ability to carry-on ? >> it is a good question, and a bit of a dilemma which is i have been appointed to be the director. there are certain legal responsibilities that i know have been the bureau has.

we have to go forward with rulemaking. we have to carry out the intent of that wall. either we do or we don't. it seems to me that the right answer is that we do. we to go ahead and that is what we're doing and that is what we will continue. >> my question is a little more narrow. have you looked into forms of redundancy or some way to insure , they still do what you want to do but that you could look at action after action and ask the question during this time of uncertainty, but have you looked at ways to insure that this committee in our oversight looks and says how many of these things will have to be redone, how much waste with libyan government and so on and to mitigate that?

unmasking, and i want to make it very clear, i'm not asking you to act as though you were not appointed. putting that is our responsibility. the question is more as we as a committee look of the ramifications of any time there is uncertainty to an appointment for a time what can we see double to reduce the chances that that uncertainty, if it were to ultimately culminate in a question of law in this case, and we could have the same argument, by the way, of the law the president signed, well, he said the senate was in recess. you cannot pass a bill in recess. there is actually a flip side to that, if you're the point -- if your plug is legal which if passed in recess maybe in doubt. have you looked at that? would you agree here today to at least put some time and energy into asking how many things would sustain your departure should for any reason that

occurred? >> i will give it some thought, congressman, and i understand the center of the question as you explained it further. i do think the one thing that we could not do this for me to sit we will not go forward and do the things the plot lentils needed do as to the rest of it, i will give it some thought. candidly, challenges, i look and say i want whenever you're thousand people by that time the end of the year comes, i want you to make sure that they did not waste their time in something that has to be redone. i might note that all of us on the day as are aware that sometimes we have to reduce ourselves, but one of those things is if we know that a vote, an executive same whether

we reduce our souls are not, sometimes it's a lot easier to say, you know, cautious says recused herself so that they cannot question about. ultimately the same outcome occurs. that is a lot of what i'm asking for, that you be concerned enough to ask the questions that , can we have bulbs and suspenders for a time while these challenges go on? >> i understand. >> thank you very much. >> the gentle lady from new york for five minutes. >> welcome, director. i believe your appointment reflected the overwhelming consensus in the american public that reforms were needed to prevent another crisis and that the creation of the consumer financial protection board and the credit-card act and other consumer protections were deeply needed. in fact, i have a letter here that was signed by 49 members of congress in support of your

confirmation, and that led to year there is some support of the other side of the aisle. i would like to put that in the record. i would like to, if there is consensus come over, a consensus . >> i would ask unanimous consent. >> some of my colleagues have expressed concern that there was not enough oversight. i no one of my amendments to the bill was to require that you come before the director come before congress twice, but i would like to put in the record that in the last 12 months, 11 months there have been 12 hearings with the cfpb before congress. also, would like to place in the record statements by all of the leading consumer protection groups in support of the cfpb deal with ford. >> without objection. >> i feel that we suffered

tremendous loss, still suffering , people losing their homes and we lost trillions of wealth in this country because of mismanagement. and i would like to try to understand why people are opposed see your point because isn't it true that one of the new authorities that the cfpb s is the ability to issue regulations to prohibit unfair, deceptive, and abusive practices as they relate to financial products, is that true, one of your goals? >> that is one of the authorities that the law gives us, yes. >> of oil that they were a number of agencies that had roles to play, but too often consumer protections was an afterthought, a secondary thought, but bottom are as we sought and the sub prime crisis, not bought a bottle.

then the agency that focuses on consumers and preventing unfair deceptive an abusive practices should be a goal that all americans support. in fact, i would like to place on the record a letter from the u.s. conference of mayors that was sent to senate majority leader reid and minority leader mikhail, and i think it pointed out very clearly that without a director then you'd cfpb is at hand strength and the civility dole among bank firms accountable and to rein in some of the financial practices debt contributed to the economic downturn that hurt so many individuals, so many communities, and our overall economy. it went on to say the agency is not able to use its authority to bring a bit unfair, deceptive, or abusive acts or practices or to issue new rules requiring better disclosures of the terms of financial products. they go on to urge a swift

appointment of a director so that we can get out there and protect consumers. and i would like to ask you -- >> without objection that will be entered into the record. >> thank you so much why do you think appearance you the bureau's ability to prohibit unfair, deceptive, and these practices require people trying to stop the agency from going forward to protect people? de area idea what is happening? >> cumbersome and, i take people at their word and descended the concern is with potential overregulation and uncertainty affecting the markets. i think, you know, my experience is that people on both sides of the aisle are trying to do what they think is right. i take that at face value. >> but there is more oversight over this bureau than any other.

the financial stability. so why would anyone want to strain or delayed their cfpb ability to prohibit these kinds of practices? to prohibit and restrain the deceptive and abusive practices. you testified earlier that you had more oversight over your actions. they could even repeal actions by the cfpb. i'm having difficulty understanding why people want to delay. the you have any idea why? >> i don't have a very informed perspective. i just know that -- i believe that the right thing for us to do is to go ahead and do work, and that is what we're going to do. >> with some of these have caused substantial injury to the american public, of these practices, products, is that true? >> the sub prime crisis, the

ability to give mortgages to people who create -- can't even pay their rent. no oversight, no guidelines. you have to admit. >> in my lifetime the single thing the herds more americans than anything ever seen was the financial crisis, all done, and recession. people lost jobs, homes, as i do think that one of the significant causes of that was the problems in the market were allowed to develop and metastasize. at the that we can help thin that of in the future. >> a great. congratulations on your appointment. >> i hate to interrupt, but your time has expired. appreciate the scenes of ideas. you're recognized for five minutes. >> i think the gentleman. my first question has something of a link the predicate, so i would ask you to bear with me.